Rosenthal Trade Capital, a division of Rosenthal & Rosenthal, completed two purchase order finance facilities to support the financing requirements of clients of a third-party factoring company and a national bank-owned asset-based lender.
A Florida-based gift and home products importer was experiencing cash flow strains as the volume of its end customer purchase orders began to increase. Its factoring company referred it to Rosenthal, which then stepped in and provided a $1 million purchase order finance facility to help fund seasonal orders from a large big box retailer.
The supply chain financing involved the purchase of products from multiple international suppliers via letters of credit and documents against payment, as well as fulfillment and logistics costs. Rosenthal’s advance rate was 100% on the cost of the presold inventory and will be repaid in full through advances on the sales invoices by the referring factor. This financing arrangement will improve the client’s collateral position and result in additional factoring income for the factor.
Rosenthal also closed a transaction involving a Midwest manufacturer of industrial machinery and components used by large OEMs and distributors. The company, a client of a national bank-owned asset-based lender, was referred to Rosenthal when it required financing of presold inventory in transit to fulfill sales orders for an imported product line.
Rosenthal provided a $1.5 million purchase order finance facility. The supply chain financing requirements of the transaction involved the purchase of product from an international supplier via documents against payment and the funding of fulfillment and logistics costs, resulting in 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 asset-based lender. This will reduce the lender’s inventory reliance under the client’s borrowing base while resulting in additional interest income due to higher borrowings on accounts receivable for the lender.
“I recently spoke on a panel at the International Factoring Association conference in April where we were approached by several third-party lenders seeking a highly experienced, reliable and cost effective purchase order financing partner to assist their portfolio clients. We are pleased we are able to work seamlessly with third-party lenders to structure solutions that serve the supply chain needs of their clients,” said RTC Division Head Paul Schuldiner. “We are highly appreciative to be considered as a preferred partner for these respected finance companies and we look forward to assisting other factors and asset-based lenders to support their clients’ complex purchase order financing needs.”