Daily News: February 13, 2018

TradeCap Provides $250K P/O Facility to Promo Products Distributor

TradeCap Partners provided a $250,000 purchase order finance facility to a Louisiana-based promotional products distributor for the casino industry. The financing will be used to support the company’s increased working capital needs and implementation of a business succession plan.

With the next generation of the family-owned company assuming day-to-day management, the company had a growing number of orders from new customers and expanding relationships with existing customers. Having supported operations through internal cash flow prior to transition of the business, new management quickly realized the growth plan would require additional capital to execute.

The company secured a factoring facility providing immediate liquidity on existing receivables as well as a solution to reduce the collection period within their cash conversion cycle. After closing, the company determined the factoring facility alone was not sufficient to support the growing order backlog.

TradeCap was introduced by the company’s factor and worked to tailor a solution around supplier payment terms, which required payment in full prior to shipment of products. TradeCap structured a facility that provided cash payments to suppliers and covered up to 100% of the cost of goods, including freight to customers. The flexibility of the facility eliminated cash flow constraints associated with the company’s pre-shipment working capital needs.

With both TradeCap and the factor in place, the company can now transition the business and execute their growth plan.