King Trade Capital completed a $5 million trade finance facility for a telecommunications equipment company with operations throughout the U.S. and Canada.
King Trade was introduced to the client by an investment bank hired to raise capital for the acquisition, recovery and growth capital of the client. The client recently filed for bankruptcy and was purchased by a new owner with industry experience. The new ownership wanted to refocus the equipment sales and grow the business again.
The company had a 17-year history of success and historically was a large supplier of telecom equipment internationally. The company was driven into bankruptcy by some major missteps of the previous management, causing it to lose significant money and then its bank financing, rendering it unable to fulfill orders to its largest customers which stopped doing business with it, sealing its fate.
The new owners brought in new management and capital to begin to grow sales again. The new capital included the King Trade facility, which will allow the company to purchase inventory to execute and grow sales profitably and not be constrained by a small balance sheet.
The trade finance solution was put in place in conjunction with a nationwide factor that will provide additional liquidity once the goods ship to customers, whether in the U.S. or internationally.
King Trade’s facility will also allow the company to grow without giving up equity to investors in order to finance sales growth.