The Hedaya Capital Group provided a $3 million letter of credit facility to a consumer products brand selling direct to consumers through its own website.
An investment firm acquired the business, planning to arrange permanent financing after the business stabilized. As the company’s peak holiday selling season approached with an expected surge in customer orders, the investment firm turned to The Hedaya Capital Group to provide financial assurance to the company’s overseas suppliers. The retail value of the orders backed by the letters of credit was approximately $10 million, a sizeable portion of the company’s annual sales.
By issuing letters of credit, the company didn’t have to make cash deposits to suppliers and was also assured that the product would be received on time and according to specifications.
“With Hedaya, we have a partner dedicated to helping us grow our business in a global market,” the founder of the investment firm, said. “Traditional lenders can take a long time; Hedaya quickly provided letters of credit to all our overseas vendors, enabling us to secure the delivery dates needed before the holiday season.”
