TradeCap Partners closed a $10 million purchase order funding solution for a Midwest-based distributor of rolled steel. The trade finance solution allowed the company to capitalize on customer demand brought on by a lack of supply and limited allocation from U.S. steel mills.
The client has been in business for more than 10 years and has historically taken advantage of favorable payment terms through a domestic partnership with another steel distributor. Based on tremendous demand resulting from current supply chain issues, the client was unable to finance large, incremental orders received from long-standing customers through terms with its distribution partner.
The company originally turned to its factor for help. Given the size of the orders and the need for letters of credit to guarantee payment to overseas suppliers and commence production, the factor was unable to help, but it recommended TradeCap.
TradeCap underwrote the orders and logistics within a couple of weeks and issued letters of credit to the overseas suppliers covering 100% of the CIF cost of goods. TradeCap’s facility also incorporated duties and other port charges to facilitate delivery of goods to various customers.
“Our client’s experience in the industry and history with its suppliers and customers was critical in providing the comfort needed to support the funding need,” Bryan Ballowe, managing partner of TradeCap Partners, said. “TradeCap’s ability to finance large orders and programs in a very short period of time evidences the capacity and flexibility of our PO funding solutions.”
