TradeCap Partners closed a $800,000 in-transit inventory finance facility for a Midwest oilfield chemical importer.
Terms with overseas suppliers required 20% to 30% upfront deposits with remaining balances due while goods were in-transit, prior to release for entry into the U.S. The company’s growing sales volumes and increased deposit requirements coupled with the impact of tariff hikes linked to ongoing U.S./China trade negotiations placed a strain on cash flow. A solution was needed to satisfy the growing working capital needs, otherwise the company would jeopardize new sales.
The company approached their receivables lender but given their current advance rate, concentration risk to the oil industry and the size of the additional capital needs, they weren’t in a position to provide accommodations. The lender determined bringing in a partner to bridge the increased exposure tied to the in-transit inventory finance needs would greatly benefit the company and subsequently contacted TradeCap Partners.
TradeCap structured an in-transit inventory facility around the projected capital needs based on monthly container flows from multiple suppliers. Payments were facilitated to suppliers under a documents-against-payment arrangement. TradeCap also provided funding to pay import tariff costs, further alleviating the company’s cash flow constraints.
TradeCap’s financing will bridge the company’s pre-invoice finance needs and facilitate increased trade flows from suppliers allowing them to fulfill their growing sales order book. With TradeCap’s support, the company can rest assured they have the financial capacity to deliver increased volumes to customers, regardless of the size of the orders.
