TradeCap Partners closed a $500,000 purchase order funding facility for a Massachusetts distributor of cenospheres used in the oil and gas and consumer products industries.
While the company was experiencing significant sales growth, its current finance provider decided to exit the relationship. This led to an immediate need to refinance existing debt and support the increased inventory capital requirements resulting from its growth. The company also needed to ensure there were no delays in maintaining a consistent flow of product to customers.
The client engaged a factoring company that was able to provide a higher advance rate against accounts receivable but still needed a solution to finance presold inventory in-transit. The factor required a partner that was comfortable with the offshore logistics of shipping products all over the world and securing payments to suppliers in Eastern Europe and Russia. It turned to TradeCap to structure a solution to support the client’s inventory finance needs.
TradeCap underwrote the transaction and implemented a funding solution with the company’s overseas suppliers to pay for inventory in-transit. The added availability from TradeCap’s purchase order finance facility combined with availability from the factoring facility resulted in a successful refinancing.
Bryan Ballowe, managing partner of TradeCap, said, “This was an especially complicated process due to the nature of the product, logistics involved and coordination with the factor to provide sufficient availability to refinance obligations with the existing lender. This is a great example of TradeCap’s capability to move quickly and provide a creative funding solution for the client’s supply chain.”