Rosenthal Trade Capital completed two purchase order finance facilities to support the financing requirements of clients of a third-party factoring company.
A Canadian and New York-based manufacturer and distributor of food and nutritional supplements was experiencing cash flow strains as the volume of a program with a large publicly-traded healthcare customer began to increase. Its factoring company referred management to Rosenthal, which stepped in and provided a $1 million purchase order finance facility to assist with the funding of the sales orders from this large customer.
The supply chain financing requirements of the transaction involved the purchase of product from an international supplier via letters of credit as well as funding fulfillment and logistics costs. Rosenthal’s advance rate was 100% on the cost of the presold inventory and the PO financing will be repaid in full through advances on the sales invoices by the referring factor. This financing arrangement will also improve the client’s collateral position and result in additional volume for the factor.
Rosenthal also recently closed a transaction involving a New York-based importer and distributor of HVAC equipment used by large construction contractors and property management companies. The company, a client of a factor, was referred to Rosenthal when its overseas supplier required deposits or prepayment before the equipment was shipped. Rosenthal restructured the transaction and assisted in successfully negotiating with the supplier to use letters of credit as an alternative funding mechanism.
A $1.2 million purchase order finance facility was established and provided an advance rate of 100% on the cost of the presold inventory. As with similar Rosenthal transactions, the PO financing will be repaid by the financing of the accounts receivable by the referring factor who will benefit from the increasing sales volume of its customer.
“Since establishing the Rosenthal Trade Capital division 15 months ago, we have continued to expand our relationships with third-party factoring companies in the U.S. and Canada and have been able to seamlessly structure solutions that serve the supply chain needs of their clients,” said RTC Division Head Paul Schuldiner.