Rosenthal & Rosenthal completed a $1 million work in process production finance deal for a food and beverage packaging manufacturer.
A private investment group tapped Rosenthal to help with the expansion of one of its portfolio companies in the food and beverage sector. Amid the COVID-19 pandemic, the company was asked to ramp up production for several of its major beverage customers to meet the high demand for product. The influx of additional orders would double the client’s revenue. Given the need for funding material costs and direct labor, the private investment group determined that purchase order financing, as an alternative to contributing more permanent equity, was the right tool to address the client’s increasing financing needs.
Rosenthal structured a supply chain finance solution for the client in the form of the $1 million work in process production finance facility. Rosenthal’s financing allowed the client to secure specialized packaging material from a domestic manufacturing supplier and funded the direct labor required to fulfill the incremental sales orders. The deal involved issuing purchase guarantees and cash payment on terms to the domestic material supplier as well as cash funding for the direct labor costs.
“Rosenthal’s PO finance team was able to structure and quickly fund a production deal for this client in an extremely challenging environment,” Paul Schuldiner, division head Rosenthal Trade Capital, said. “Rosenthal’s ability to provide work in process production financing was a decidedly better alternative than raising more equity for both the private investment group and the company’s other shareholders, especially with all the uncertainty surrounding COVID-19.”
Rosenthal & Rosenthal is a factoring, asset-based lending and purchase order financing firm.