TradeCap Partners provided a $1.4 million production finance facility to a Texas-based, minority-owned consumer packaged goods company. The financing helped the company launch its first large wholesale account.
The company formed when two industry veterans with combined experience in sales, operations and supply chain management joined forces. In under 12 months, the company landed its first large wholesale account. Having capitalized the company primarily with sweat equity and a small friends and family round, the founders were in search of non-dilutive capital to support the wholesale launch.
The company’s banker advised the company to seek purchase order financing, as it would be the best option given the size of the company’s capital need and desire to maintain its current equity stake. This led the company to TradeCap.
TradeCap vetted the company’s ingredients and packaging suppliers as well as its co-packer. TradeCap paid deposits to packaging and corrugate suppliers to ensure timely deliveries. TradeCap also paid for ingredients, extended payment terms and provided availability for 100% of the costs to fulfill the launch, including outbound freight to the wholesaler.
“We’re extremely excited to partner with these two experienced founders that took the entrepreneurial leap,” Clinton Stanton, managing partner of TradeCap Partners, said. “Our purchase order production finance solution was a perfect fit that aligned the type of capital with the transactional need and the founder’s objectives. We look forward to supporting their continued growth and expansion.”