Daily News: September 15, 2014

King Trade Capital Provides PO Facility for Apparel Company

King Trade Capital announced the recent funding of a $4 million purchase order finance facility for a California-based, high-end men’s apparel designer and manufacturer.

KTC was contacted by the special situations group of a national asset-based finance company to discuss a unique opportunity to help an existing client grow. The company was interested in improving the diversification and scope of its international sourcing by expanding its vendor list to include more vendors in different countries. It did not have sufficient open credit from its vendors or the availability under an asset-based facility to support the amount of presold inventory required to fulfill a growing order book. While the asset-based finance company was comfortable in lending against inventory located in the U.S. warehouse, it sought out KTC for its expertise in funding international inventory purchases which included properly structuring the financing of in-transit inventory.

KTC quickly worked in conjunction with the company and ABL to come up with a finance solution. The solution entails both LC (letter of credit) and DP (documents against payment) facilities for the apparel company, which provides flexibility when dealing with each overseas supplier. KTC established an intercreditor agreement with the ABL and a national factoring company that was providing credit protection and A/R collection services on behalf of the company.

The company now has multiple finance partners working together to help achieve a common goal, fulfilling and supporting future sales growth.

KTC’s experience in providing an import finance solution along with supplying the incremental capital benefitted the company, its lenders and the overseas suppliers that can produce and ship knowing it will be paid on a timely basis. Most importantly, it allows the client to accept orders from new and existing customers that can confidently increase the volume of orders to the company knowing it has the capability to fulfill them.