TradeCap has closed a $350,000 purchase order facility for a CA-based importer of scooters and skateboards selling to big box retailers in the U.S. and Canada.
The client had minimal sales history, however, the owners and management team had many years of industry experience and maintained long-standing relationships with many former big box customers. The client recently acquired distribution rights to a line of products previously distributed by another company that dropped the line following the bankruptcy of their major retail customer. Discussions with a factoring company led them to TradeCap.
Unable to obtain a credit line from the overseas factory, the client needed financing to support production tied to sales. The overseas factory required a cash deposit or an irrevocable letter of credit to commence production. TradeCap advised the client of the pitfalls associated with cash deposits to suppliers and suggested a letter of credit structure be utilized.
The transaction needed to be underwritten quickly in order to maintain the time-sensitive shipping schedules of customers. TradeCap was able to underwrite and close the PO facility within a week. An irrevocable letter of credit with terms acceptable to the factory was structured and issued. Goods are currently in production and are scheduled to be delivered to customers on time.
TradeCap’s purchase order funding solution will enable the client to successfully execute on the initial orders from customers and set the stage for large growth in 2019. Bryan Ballowe, TradeCap’s managing partner commented, “We are very happy to be a trusted source of expedited financing for our clients and referral partners. We value the strategic partnerships we have in the factoring and asset based lending community and look forward to continue adding value to those relationships.”