Rosenthal & Rosenthal completed a $2 million purchase order finance facility to support the production financing requirements of a New York-based accessories company that operates with several prominent licenses.
The company required additional supply chain financing when it experienced a significant uptick in sales opportunities for one of its main licenses. As sales growth outpaced the company’s ability to obtain additional open credit from overseas suppliers, the company sought a supply chain financing solution to ensure the efficient flow of product from those suppliers to customers.
Rosenthal provided a P/O financing facility so the company could fulfill an influx of sales orders for a backpack program designed in collaboration with a major retailer. The transaction’s supply chain financing requirements involved the purchase of product from the company’s overseas supplier, with funding through cash against documents (i.e., documents against payment or DP financing), as well as funding fulfillment and logistics costs. Rosenthal’s advance rate was 100% on the cost of the presold inventory.
“It was very rewarding to provide our client with a solution that enabled the company to successfully execute on this program that they worked hard to obtain, while simultaneously solving the complex supply chain finance requirements from their overseas supplier,” said Paul Schuldiner, Rosenthal division head . “This transaction is a great example of how cash funding can be used as a P/O financing mechanism when letters of credit are not necessarily required by international suppliers. Soundly structured production financing allowed this company to take advantage of incremental sales growth opportunities and created a win-win for all parties involved.”
