TradeCap Partners closed a $3 million supply chain finance facility for lighting distributor based in Colorado.
Supply chain disruptions over the last 18 months placed strain on the company’s relationship with suppliers. Facing increased production lead times and in some cases non-performance, the company made the decision to seek new manufacturing partners to expand its supplier base and diversify risk. Although necessary, the pivot resulted in less favorable payment terms with new suppliers. In need of a solution to jumpstart production with the new suppliers, the company sought help from their receivables finance company who in turn introduced TradeCap.
TradeCap collaborated with the client to understand the financing needs related to both new and existing suppliers. A structure was devised to accommodate payment terms of multiple suppliers utilizing letters of credit, documents against payment and freight and duties financing. TradeCap’s solution supported a combination of FOB Asia and domestic import sales from multiple retail and wholesale customers.
With TradeCap’s facility in place, the company was able to accelerate expansion of its supply chain and inject the capital needed to increase production and the flow of goods to fulfill the ballooning backlog. The company continues to bring the backlog current, reducing the strain on customer relationships created by supply chain disruptions.
”Supply chain bottlenecks continue to create challenges for companies around the globe,” Clinton Stanton, managing partner at TradeCap, said. “Our consultative approach and flexible finance offering adds value to U.S. importers facing cash flow, production and sourcing challenges. Solidifying this relationship was very rewarding as the collaborative effort successfully achieved the client’s goal of expanding their supply chain.”