Real Good Food has secured a short-term loan from two of its largest shareholders as it prepares to report a loss-making year.
The Liverpool-based food manufacturing business, which specialises in cake decoration, has received £550,000 from Downing LLP and Omnicane Investors.
Downing LLP has a stake of around 7% in the company while Omnicane Investors is its second-largest shareholder with a holding of over 20%.
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The funding comes after Real Good Food secured £2.5m from Hilco Private Capital in November 2022.
In a statement issued to the London Stock Exchange, the group said: "As noted in its half year results announcement on 16 December 2022, market conditions remain very challenging due to the perfect storm of rising costs and lower revenues during the currently difficult economic period.
"The group's radical reform programme, however, is progressing well with significant price resets and cost savings having been achieved.
"Our focus currently is on improving manufacturing efficiency and balancing capacity to levels of demand.
"However, Q4 revenue was below expectations, as consumer demand and confidence were knocked by speculation in the media of a recession in the early months of 2023."
When reporting its half-year results, the group's executive chairman said a "crisis" has helped spark "a radical programme of reform to return it to profitability".
Real Good Food is expected to reported a loss for the year to March 31, 2023.
Real Good Food reported pre-tax losses of £18.9m for the 12 months to March 31, 2022, compared to losses of £6.1m in the prior year.
However, the group added that the "full year benefit of the price resets and cost savings are expected to lead to a significant performance improvement in the new financial year".
It said its EBITDA is anticipated to be in the range of £2m to £4m.
Executive chairman Mike Holt said: "Market conditions remain as challenging as when we last reported in December 2022.
"However, our internal reform programme is progressing well and, without relying on a market upturn, the board expects the group to be both EBITDA profitable and cash generative in the new financial year.
"After a tough start to 2023, we are beginning to see early signs of some improvement in demand, particularly within B2B and wholesale markets."
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