Rosenthal & Rosenthal completed an $850,000 purchase order finance facility to support the production financing requirements of a New York-based men’s loungewear company that operates as a licensee of an iconic golf and lifestyle brand.
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The company required additional supply chain financing when it obtained larger than expected orders after it expanded into a new distribution channel and could not obtain open credit from overseas suppliers. A production financing solution was critical to ensure the efficient flow of product from its suppliers and timely delivery to its big box retail customer.
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Rosenthal provided a PO financing facility that involved the purchase of product from the company’s overseas supplier, with funding through letters of credit, as well as funding fulfillment and logistics costs. Rosenthal’s advance rate was 100% on the cost of the presold inventory. In addition, the PO Finance solution ensured that all royalty payments under the licensing agreement would be met on a timely basis.
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“When consumer products companies such as our client are successful in establishing new channels of distribution, cash flow problems often arise when they attempt to meet the increasing pre-shipment financing requirements of their overseas suppliers,” said Rosenthal Division Head Paul Schuldiner. “This transaction is a great example of how PO financing can solve cash flow issues to benefit all parties in the supply chain.”
Forward for Specialty Finance
