Iron Horse Credit provided a $3 million stand-alone inventory revolving line of credit and Alterna Capital Solutions provided a $2.5 million accounts receivable-based facility to a manufacturer and importer of women’s footwear.
The company’s sales have been shifting from conventional retail to e-commerce channels, requiring flexible advance rates on inventory. During this transition, the COVID-19 pandemic hit and caused the company’s sales to drop and orders to be postponed until early next year.
A debt restructuring advisor introduced IHC and Alterna to the transaction. IHC’s stand-alone inventory would provide higher capital availability to the client while leveraging both the on-hand and in-transit inventory, and Alterna’s specialty and alternative financing capabilities would provide access to more capital tied up in invoices. The client selected the IHC and Alterna solution, with higher advance rates than the company’s existing bank line of credit, which the company will use to fund the purchase of materials for fulfilling new orders and to fuel growth. Working in parallel on their respective due diligence and in collaboration with the company’s incumbent bank, IHC and Alterna closed and funded the transaction and met all timelines.
“We are excited to provide the company with the working capital needed during these difficult times by leveraging both the on-hand and in-transit inventory,” Cesar Silva, vice president of business development for IHC, said. “It was great to see both our team and our A/R partner work diligently to get the transaction over the finish line.”
“Even in a good year, growing small businesses seek access to working capital. Layering a pandemic on top of the market-wide gap in capital has only compounded the liquidity drought,” Stan Carpenter, founder and president of Alterna Capital Solutions, said. “I’m pleased with my team’s performance in collaboration with the IHC team, and I look forward to seeing our mutual client strengthen and grow.”
Iron Horse Credit is a finance company providing stand-alone inventory revolving lines of credit to small and medium-sized companies.
Alterna Capital Solutions provides small business financing solutions.
