TradeCap Partners closed a $7 million purchase order funding facility for a supplier providing new and used equipment to big box retailers located throughout the United States and Canada. TradeCap’s facility is comprised of cash payments against shipping documents and documentary bank letters of credit, securing payment to the company’s overseas suppliers for the direct cost of goods.
A large multi-national retailer had recently awarded TradeCap’s client significant orders for equipment used by customers in stores throughout the United States due to increased lead times and quality issues the retailer was experiencing with other suppliers. The orders required equipment to be delivered over a four month timeframe in an amount that exceeded the client’s prior year’s sales. TradeCap’s client arranged for two overseas suppliers to work in tandem and produce the goods to meet the retailer’s delivery schedule. However, due to the quantities that needed to be produced, the overseas suppliers were unwilling to extend favorable payment terms.
TradeCap was referred to the client by its bank that had a borrowing base line of credit in place supported by receivables. The bank agreed to increase the size of the line in anticipation of increased sales, yet it was not able to provide a solution to address the client’s pre-shipment working capital needs related to suppliers’ timely production and shipment of goods. TradeCap and the bank had a long-standing relationship having successfully helped other businesses with similar needs. The bank needed to provide its client the flexibility to secure an immediate solution to maintain the relationship and knew TradeCap would be able to execute quickly, while also providing its client guidance on the structuring process.
“This is a great story and exciting relationship for TradeCap to start 2023,” Bryan Ballowe, managing partner of TradeCap, said. “It highlights the benefit TradeCap’s purchase order funding solution brings to clients seeking incremental capital to execute on large sales opportunities, as well as to its partners in the asset based lending and factoring industry. Our referral sources treat Tradecap as an extension of their very own product offering and put a lot of trust in us to execute timely and professionally. We take pride in knowing we are a trusted and integral partner our referral sources can look to consistently and confidently time and time again.”