King Trade Capital funded a $1.75 million purchase order finance facility for a California-based importer of wireless climate control devices.

King Trade Capital was contacted by an asset-based lender to help an existing client with a liquidity need spurred on by a newly secured master supply agreement with one of its major customers.

The company needed additional liquidity since it did not have availability from its ABL facility nor sufficient open credit with its major overseas supplier. The client had worked for a long time to grow its relationship with its end customer, but due to lack of traditional collateral, it could not order or purchase the necessary inventory needed to fulfill the initial order under their new MSA.

King Trade Capital worked in conjunction with the company and the asset-based lender to create a finance solution that leveraged King Trade Capital’s work in funding international inventory purchases along with properly structured financing of in-transit inventory. This entailed issuing letters of credit in lieu of cash deposits, alleviating the risk of providing unsecured financing to overseas factories in the form of cash deposits and serving as a payment guarantee to the supplier.

King Trade Capital established an inter-creditor agreement with the asset-based lender, which is advancing on the accounts receivable, enabling a seamless supply chain finance solution to be put in place quickly.

The company now has two finance partners working together to achieve a common goal of fulfilling and supporting sales growth. King Trade Capital’s experience in providing an import finance solution by supplying incremental capital benefitted the company’s sales and its asset-based lender increased accounts receivable volume. The overseas supplier gained assurance of timely payment.

The client can increase its sales profitably under the newly secured MSA and has confidence that they have a finance facility that fully supports them when they accept additional contracts and orders from new and existing customers.