TradeCap Partners closed a $500,000 production finance facility for a Texas-based manufacturer of couplings used in oil and gas and industrial applications.
Several members of the company’s management team acquired the company in the last six months and relocated manufacturing operations to a new facility. As the U.S. economy has reopened, product demand has increased and the company received $2 million in purchase orders from existing customers. With only a factoring facility in place, the company needed additional capital to purchase steel feedstock used in production. Recognizing the need, the company’s factor turned to TradeCap Partners for a solution.
TradeCap Partners structured a production finance facility providing upfront payments to steel suppliers and advances for related manufacturing costs. The solution increased the company’s availability threefold, allowing it to purchase more feedstock and operate closer to full capacity. The company’s throughput increased, accelerating fulfillment of the order backlog, resulting in higher net margins and profitability.
“The flexibility of our purchase order finance offering, which includes production financing, is a key differentiator from competition,” Clinton Stanton, managing partner of TradeCap Partners, said. “With many companies shifting away from reliance on suppliers outside the U.S., we expect to see more opportunities where we can partner with small and mid-size manufacturing companies to fulfill growth capital needs.”
