Tradewind provided a $500,000 non-recourse export factoring facility to a leading designer, manufacturer and exporter of technical tubes and hoses based in Spain.
The company’s products are used in the industrial, agricultural, construction, and gardening sectors, both in Spain and throughout Europe. It will apply proceeds from the facility to fund the working capital needs of its tubing business so it can maximize growth abroad.
Although the company was equipped with the manufacturing capacity to increase production, its growth was stagnant because it did not have sufficient working capital to take advantage of opportunities with large foreign buyers who require extended payment terms.
While the company had experienced decades of growth and success within Spain, it also offered a strategic advantage to European buyers who benefitted from a short supply chain. In order to capitalize on opportunities with customers outside of its country’s borders and expand its footprint across Europe, the company needed a working capital solution to fulfill large orders and bridge the long lead times and in-transit periods that come with exporting.
When its local factoring company in Spain failed to offer competitive prices and posed restrictions and limitations on foreign accounts receivable, Tradewind, leveraging its international capabilities, carved out the company’s foreign A/R while the tube producer’s bank handled the domestic A/R. Tradewind’s non-recourse facility also provided credit protection in case any of the company’s buyers defaulted on payment.
“Our client had all the right characteristics for high future growth except sufficient working capital. Tradewind’s factoring, coupled with the P/O financing that they received from a private investor, was the perfect solution for the client because it gave them the ability to take on orders and negotiate credit terms with large overseas buyers—ultimately allowing more room for growth,” said Brian Dowd, vice president of Sales in Tradewind’s New York office.
