TradeCap Partners closed a $1 million purchase order finance facility with an aerospace parts distributor based in Florida.
Continued year-over-year growth, combined with an existing credit facility structured around a single customer, was constraining cash flow for the distributor. The lack of availability with its current lender resulted in lost sales. The company engaged a debt placement firm to secure a more flexible financing structure. TradeCap and an asset-based lender were introduced as the solution.
TradeCap’s purchase order finance facility created availability against the company’s domestic and foreign sales orders and also accommodated payments to both domestic and international suppliers for the procurement of goods. Upon shipment and delivery to customers, the asset-based lending facility provided liquidity against the receivables to repay TradeCap’s advances against purchase orders along with additional working capital.
The company was able to quickly work through its order backlog and now has a properly structured finance solution in place that provides liquidity when cash flow is tight yet orders are increasing. The new structure allows management to focus on growing sales and executing vs. managing cash flow and having to make the tough decision of which orders to fill and which to forgo.
