United Capital Funding Group, a Florida-based factoring firm with offices in Chicago provided a $2.5 million debtor-in-possession (DIP) facility to a California-based sports equipment wholesaler. With this new flexible form of financing, the wholesaler could work through its post-petition plan of reorganization and maintain its long-standing relationship with its major retail customer.
The wholesaler recently filed bankruptcy due to supply chain issues from an overseas shipment not arriving as scheduled. This supply disruption caused a delay in product output during their primary selling season and resulted in a substantial decrease in revenue which forced the California-based company into Chapter 11 bankruptcy. United Capital Funding reviewed the company’s current performance and steady record of service under its sole contract with a major retail store to determine a credit facility of $2.5 million was warranted. With this new facility established under the court’s approval, United Capital Funding purchased the wholesaler’s current accounts receivables, reviving liquidity that would work to support the company’s future purchase orders.
“Our goal from the beginning was to find a sustainable solution for this company,” Nancy Kalman, senior business development officer at United Capital Funding, said. “We’re now positioned to grow as an integral part of the company’s life cycle as they work their way out of bankruptcy.”