Rosenthal & Rosenthal, a U.S. factoring, asset-based lending and purchase order financing firm, provided a $950,000 purchase order finance facility to support the production financing requirements of a California-based cosmetic and beauty products company.
The cosmetics company experienced a surplus of new orders after receiving a large sales program from a brick-and-mortar retailer. The surplus created production capacity issues and cash flow challenges that would potentially disrupt the timely delivery of the products to customers. The client’s CPA introduced the company to Rosenthal’s West Coast office to put a production financing program in place.
Rosenthal’s work-in-process production financing program required both payments to overseas suppliers for packaging as well as payments to domestic suppliers for ingredients, processing and fulfillment. The purchase of product from the company’s overseas supplier was funded by utilizing a combination of documentary letters of credit and documents against payment. In addition, cash funding was provided to a domestic contract manufacturer for processing, fulfillment and logistics costs to complete and ship the finished products. Rosenthal’s advance rate was 100% on the cost of the presold inventory.
“Rosenthal is committed to expanding our production financing program opportunities for companies in the cosmetics, beauty and wellness space,” Paul Schuldiner, division head at Rosenthal, said. “This particular transaction capital program made it possible for our client to fulfill their orders from a large retailer while allowing them to address the cash flow needs of the direct-to-consumer distribution channel internally. We’re pleased we were able to provide our client with a platform to exponentially grow their business and execute on their omnichannel sales strategy.”