Rosenthal & Rosenthal completed a purchase order finance facility to support the production financing requirements of a California-based distributor of hand sanitizer and anti-bacterial soap.
Rosenthal was introduced to the company by a national bank asset-based lender who was looking to refer a prospect to a purchase order funder that could assist a company receiving large orders for hand sanitizer and soap from one of the largest retail chains.
The company’s owners and management team are long-time industry leaders in the health and beauty aid sector, with deep connections into retail distribution channels. The large retail chain placed an extraordinarily large order for hand sanitizer amid the COVID-19 pandemic. The company immediately aligned their supply chain and purchased bottles and pumps from Asia to start the production process. The bottles and pumps were then delivered to a reputable FDA-approved domestic co-packer who completed the finished products for delivery to the retail customer.
Rosenthal quickly established a $4 million purchase order finance facility that allowed the client to fund the production of product that was backed by $10 million of sales orders from the large retailer. The funding was provided via domestic purchase guarantees and cash funding to pay the co-packer in a timely fashion. In addition, letters of credit were made available to assist in financing the bottles and pumps from the overseas supplier. The completion of the hand sanitizer transaction also led to an additional multi-million dollar order for anti-bacterial soap.
“The challenges associated with sourcing and delivering much-needed personal protection products during the pandemic highlight how valuable purchase order financing can be as an alternative to raising more equity,” Paul Schuldiner, Rosenthal division head, said. “This transaction is representative of our team’s extensive experience facilitating inventory financing solutions for companies with domestic and international production requirements. Purchase order financing is a critical tool for companies that want to take advantage of larger sales opportunities with products that can help to combat the spread of COVID-19.”