King Trade Capital (KTC) completed a $5 million purchase order finance facility for a California-based HVAC equipment supplier. King Trade Capital was introduced to the HVAC company by its factoring company, one which KTC has a longstanding relationship.
The HVAC company began operations in 1987 and was a successful business until they experienced a steep decline in sales in 2020 and 2021 due to pandemic-related closures in its market. During that time the company pivoted to sell units to residential and commercial developers, and then in 2022 as business returned and hotels started to re-open the company experienced a significant increase in new and replacement business. The rapid recovery of sales created the need for a specialized finance solution to help secure production and inventory from overseas vendors to deliver HVAC units to its domestic customers.
King Trade Capital moved quicky to understand the business and their ability to grow if provided the proper capital. KTC quickly underwrote the company and negotiated subordination agreements with the SBA for two economic injury disaster loans received during the pandemic and completed an intercreditor with the factor to provide an end-to-end finance solution for the client that supports the increased sales demand from its end customers.
KTC’s finance solution provides documentary letters of credits to pay the overseas manufacturers and secures the future production of HVAC units and parts. King Trade Capital’s financing ensures the goods are shipped in a timely manner to meet the delivery expectations of the end customers.
King Trade Capital’s finance solution and supply chain logistics expertise allows the HVAC company to fulfill its current increased sales demand and offers them the confidence and capability to bid and deliver on the quickly growing sales opportunities.
