TradeCap Partners closed a $1.5 million production finance facility for a consumer-packaged goods company based in the Northeast whose products can be found online and in stores across the U.S.
The recent turmoil that rippled through U.S. financial institutions resulted in the company’s primary lender having to shed its portfolio of assets. Tightening credit markets created an untimely obstacle for the company as it sought a new lender that could support growth. The company selected a non-bank asset-based lender to replace its existing lender, but several upcoming large seasonal wholesale programs required more capital than availability under the new ABL facility.
In an effort to enhance their offering, the ABL introduced the company to TradeCap and its production financing capabilities to satisfy the company’s seasonal purchase order finance needs. The company will use TradeCap’s financing to make payments to various ingredient and packaging suppliers as well as co-packers for tolling costs. Upon shipment of goods under the programs, the company will use increased availability under the ABL facility from the resulting receivables to repay TradeCap’s purchase order financing.
“The flexibility of TradeCap’s purchase order funding solution serves as a resource the company can tap into during seasonal peak working capital needs when supplier terms are stretched and cash flow is tight,” Clinton Stanton, managing partner of TradeCap Partners, said. “The combined capacity from the ABL and TradeCap provide a runway for continued growth.”
