TradeCap Partners closed a $550,000 import letter of credit facility for a West Coast beauty brand company. The funds will be used to support production and pay freight, duties and inland logistics costs.
After two years of selling online and an appearance on the television series “Shark Tank,” sales rose significantly. A cosmetic and beauty products retailer subsequently contacted the company to get the brand into its customers’ hands as quickly as possible.
The initial retailer order created an incremental finance need given it represented a substantial increase over and above the already forecasted 2018 sales growth. The company worked to close the deal with an investor but wanted to find a way to fill the opening order without additional investor reliance in order to preserve equity.
The company initially contacted a consultant that had previously secured short-term funding with hopes they could provide a solution. The consultant recognized the existing funding sources did not have the capacity to accommodate the company’s current finance needs and engaged TradeCap to provide a solution.
TradeCap worked in conjunction with two existing creditors supporting inventory requirements of the business’ online division and negotiated subordination agreements allowing the purchase order to be financed. The company established a relationship with a factor and TradeCap negotiated an inter-creditor agreement that governed the take-out of TradeCap’s purchase order financing once the order was delivered and invoiced. TradeCap’s facility was structured to accommodate 100% of the costs needed to fulfill the order.
“We went the extra mile to establish this relationship, investing the time to structure a facility that worked in tandem with existing creditors and provided the non-dilutive growth capital the client was seeking to complete the sale. It’s a great example of our commitment to add value for our clients and help them achieve their goals,” said TradeCap Managing Partner Clinton Stanton.