Rosenthal Trade Capital, a division of Rosenthal & Rosenthal, completed a $1.5 million purchase order finance facility to support the financing requirements of a premium accessory design company.
The New York-based designer and importer of licensed accessories experienced cash flow strain when its business was impacted by the challenges of supplying traditional brick and mortar retailers. With their strengths in product design and sourcing, the company looked for other business segments that would allow it to leverage its strengths and enter new markets.
Based on sales efforts, the company received a $2.2 million sales order from a major airline seeking to update its branded accessories for employees for use in day-to-day operations. However, when the company stretched its payment terms with its main supplier, there were insufficient open credit terms to manufacture and import the product for the airline.
Realizing that PO financing may be a viable solution, the company’s outside CPA firm approached Rosenthal on its behalf. After a review of the situation, Rosenthal provided a $1.5 million PO financing facility for the initial transaction and follow-on business so the company was able to fulfill the airline’s sales order.
The transaction’s supply chain financing requirements involved the purchase of product from the company’s overseas 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.
“It was very rewarding to provide a solution that enabled our client to successfully execute on a new line of lucrative business, while solving the supply chain finance requirements of the company’s overseas supplier,” said Rosenthal Division Head Paul Schuldiner. “This transaction is a great example of how PO financing can allow companies to take advantage of incremental sales growth opportunities, creating a win-win for all parties involved.”