Daily News: March 1, 2013

King Trade Provides $1.8MM Facility For Eyewear Designer

King Trade Capital said it has provided a $1.8 million purchase order facility for an eyewear frame and accessory designer. KTC’s financing offered a solution that allows the company to fulfill a $3 million national rollout for a big box retailer. KTC’s PO finance facility offers a full supply chain finance solution, facilitating payments to several product suppliers, domestic and international, a 3PL and logistics providers involved in implementing and completing the rollout.

KTC said it was introduced to the client by its bank, which was looking for a solution to allow the company to acquire the inventory needed for the retailers’ nationwide roll-out. The bank knew the client well as they had financed the purchase of the company for a well-known private equity group. In addition to the credit facilities extended by the bank, the client had a second lien loan from another creditor that also supported the acquisition and planned expansion. Shortly after the acquisition, the client’s sales declined due to the slowing economy which placed a strain on cash flow and the client’s ability to stay in compliance with both creditors. The creditors stuck by the client’s side, helping the company weather the storm by bringing in the bank’s factoring group to enhance liquidity and cash-flow.

KTC added that this sales growth opportunity came to the client after years of selling to the big box retailer and looking for ways to grow their business. The company received a popular new license and approached the retailer with the idea. Immediately, the retailer wanted a test order and shortly thereafter they wanted to proceed with a national product rollout. This was good news for the company but unfortunately, the creditors weren’t in a position to provide the incremental capital needed to help buy the necessary inventory to complete the rollout.

Given the revenue and profit the new program would generate for the company, the creditors realized it was in their best interest, as well as the client’s, to locate a finance partner to help facilitate the program. KTC was invited to offer a solution and was able to structure inter-creditor and subordination agreements with the bank, factor and second lien lender, enabling KTC to provide the capital the client needed to complete the rollout.