Rosenthal & Rosenthal completed a $4 million purchase order finance facility to support a California-based toy company that operates under its own brand as well as with several licenses.
The company required additional production financing to alleviate cash flow strain that it faced as sales growth for one of its prominent licenses quickly outpaced its ability to obtain additional open credit from overseas suppliers. The company needed the financing to ensure the flow of product from overseas suppliers and delivery to customers continued.
Rosenthal’s financing allowed the company to fulfill an influx of sales orders for a plush toy program with several major retailers. The transaction’s supply chain financing requirements involved the purchase of product from the company’s overseas suppliers, with funding through both letters of credit and cash against documents, as well as funding fulfillment and logistics costs.
Rosenthal’s advance rate was 100% on the cost of the pre-sold inventory. As part of the program, Rosenthal also negotiated an inter-creditor agreement with a multi-national bank that was providing a supply chain accounts receivable financing program to the company.
“The complexities of the supply chain in the toy industry require a flexible yet through understanding of quality control, logistics, licensing and seasonal cash flow requirements,” said Rosenthal Division Head Paul Schuldiner. “This transaction is a great example of how our PO financing programs can not only provide the required funding, but also assist in structuring all the integral elements companies need to successfully execute on incremental sales growth opportunities.”
