Rosenthal & Rosenthal completed a $1 million purchase order finance facility to support the production financing requirements of a Tennessee-based uniform importer.
The client is a woman-owned and operated import business primarily serving multinational food service supply companies. The principal’s family has roots and a track record in the textile industry, but the client was looking to capitalize on an entrepreneurial opportunity that would allow her to branch out on her own. Rosenthal was introduced to the client by the factoring division of a bank in the Midwest, as purchase order financing was being considered as an option to work in tandem with the bank’s proposed factoring facility.
Rosenthal assessed the reliability of the company’s supply chain, the quality of the end customer purchase orders and the management team’s experience. The company required a solution that would not involve raising equity to ensure it could make the payments necessary to overseas suppliers on time. Rosenthal established a $1 million purchase order finance facility.
The supply chain financing requirements of the transaction involved the purchase of product from international suppliers via letters of credit. Rosenthal’s advance rate was 100% on the cost of the pre-sold inventory, inclusive of cash payments for freight and duty. The bank’s factoring division will advance on the accounts receivable as the repayment source of Rosenthal’s purchase order financing.
“As the effects of COVID-19 impact supply chains worldwide, food service companies have been more focused than ever on ensuring the safety of their employees and customers,” Paul Schuldiner, division head of Rosenthal & Rosenthal, said. “Companies such as this one have utilized their product sourcing relationships to help their customers meet safety requirements that have become increasingly more stringent. Securing a funding source with strong international capabilities as well as experience evaluating quality control measures for products was critical to our new client’s ability to win business from these large food service companies. As was the case in this transaction, Rosenthal remains committed to providing soundly structured financing solutions that meet the product safety measures required in a COVID-19 world.”
