Rosenthal & Rosenthal completed a $500,000 purchase order finance facility to support the production financing requirements of a Florida-based importer of laboratory supplies.
This early-stage company was established by two entrepreneurs that come from the medical, cyber-security and global supply chain worlds. The company focused its initial efforts on personal protective equipment distribution during the beginning of the COVID-19 pandemic. Due to the company’s overseas sourcing capabilities, it began to receive sales orders for laboratory supplies from a Fortune 1000 customer. As a result, a financial consultant contacted Rosenthal and recommended the client utilize purchase order financing instead of an equity raise to fund the purchase of pre-sold inventory. Rosenthal’s $500,000 facility allowed the company to fulfill the sales program and deliver the products on time to its customer base. Cash against document payments were used to fund the purchase of product from the company’s overseas supplier as well as duty and freight costs. Rosenthal’s advance rate was 100% on the cost of the presold inventory.
Rosenthal worked in conjunction with the accounts receivable financing company of a regional bank on this transaction. The accounts receivable financing solution created access to additional liquidity for the client over and above the repayment of the purchase order financing provided by Rosenthal, accelerating the cash flow cycle of the overall transaction.
“Rosenthal was pleased to assist this company in obtaining a sole source supply contract from a major distribution company by establishing a flexible purchase order financing program,” Paul Schuldiner, division head at Rosenthal & Rosenthal, said. “Purchase order financing has proven to be an excellent tool to enable the funding of inventory required to fulfill a large customer concentration or seasonal sales spike. We look forward to helping other companies and their existing commercial lending sources take advantage of out-of-the-box opportunities.”
