TradeCap Partners closed and funded a $1.5 million purchase order finance facility for a distributor of recreational sports products based out of the Southeastern United States. The facility will be used to secure cash payment to various manufacturers located in the U.S. as well as Canada.
A U.S.-based factoring company introduced TradeCap to the client. The factor had an existing relationship with the client and had previously provided small over advances to help with the company’s pre-shipment working capital needs. However, due to significant growth in customer orders that resulted in incremental capital needs outside of the scope of what the factor was comfortable providing, the factor brought in TradeCap. TradeCap was able to underwrite the company’s funding needs, as well as its various product lines and license requirements in order to provide a funding solution that would secure payment to its U.S. and Canadian-based suppliers prior to goods being released and shipped to fulfill customer purchase orders. TradeCap’s purchase order funding solution not only provided an incremental capital solution to cover the direct cost of pre-sold goods, but also freed up working capital for the company to fund product development and marketing initiatives.
“This is a perfect example of how TradeCap’s purchase order funding provides a non-dilutive solution for companies to successfully execute on customer demand, while simultaneously freeing up existing working capital to focus on long term growth initiatives,” Bryan Ballowe, managing partner of TradeCap, said. “I am excited to work with a company who has built a successful brand, but also whose management has the foresight to lever existing customer purchase orders in the short term with long term goals in mind. Our solution will allow management to do what they do best—continue building the brand, grow customer relationships, and sell product.”
