TradeCap Partners closed a $9 million purchase order facility for a West Coast-based industrial safety gear manufacturer.
Industry experience and product knowledge of the management team of the manufacturer led to an exclusive agreement with a global building materials distributor to design and manufacture private label safety gear products. Initial load-in orders for the items from existing dealer, wholesale and retail channels overlapped, resulting in large upfront capital requirements to produce goods. Given timing of the load-ins and the volume of purchases, goods needed to be put into production immediately to meet delivery dates.
The manufacturer’s bank originally referred a factoring company to help, however, the size of the finance need could not be supported by current assets on the balance sheet. The factor introduced TradeCap as its trusted PO finance partner to provide a solution that leveraged customer purchase orders to secure the capital needed to facilitate production and delivery of the goods.
TradeCap worked with the management team and suppliers to structure letters of credit to support production. TradeCap’s facility financed 100% of the cost of goods required to fulfill the customer purchase orders. Letters of credit were issued to suppliers for the initial load-in quantities and a framework was provided for future replenishment purchases as the programs expand.
“We’re grateful for our relationships with finance professionals across the country that place their trust in us to help their clients,” Clinton Stanton, managing partner at TradeCap, said. “The scale and impact this growth opportunity will have on our client’s business is game changing. Partnering with companies and providing capital solutions that allow them to successfully execute their business plans is very rewarding.”