Rosenthal & Rosenthal recently completed a $4.5 million inventory production finance deal for an importer of recreational sporting products.
The client was experiencing double-digit sales growth as a result of previously successful sales programs from several big box retailer programs for a seasonal product line. If executed, the influx of additional orders would double the company’s revenue from $45 million to nearly $90 million.
Given the extraordinarily large seasonal inventory build and the projected degree of inventory reliance within the forecasted borrowing base, the company’s bank suggested partnering with a purchase order financing firm to assist with the increasing financing needs.
Following a prior successful partnership, the bank’s commercial lending division contacted Rosenthal to structure a supply chain finance solution. Rosenthal provided a $4.5 million purchase order finance facility, allowing the client to obtain goods from multiple overseas suppliers by issuing letters of credit in lieu of cash deposits. Without this soundly structured solution in place, the company would have been exposed to risks in its supply chain because the amount of deposits required were simply not feasible.
“Rosenthal was honored to be referred by a long-time banking partner and have the opportunity to help our mutual client achieve extraordinary growth,” said Rosenthal Division Head Paul Schuldiner. “This deal is a great example of how Rosenthal can successfully partner with third-party banks and other finance companies to address challenges that clients face with their international supply chains. We look forward to assisting more companies that require either traditional purchase order financing for finished goods or work in process production financing.”
