TradeCap Partners closed a $7 million purchase order finance facility for a beauty and wellness company based in Florida. The company designs, manufactures and distributes skincare devices, accessories and topical products.
The company experienced more than 100% year-over-year growth in 2020, with existing and new customer commitments for 2021 projected to double sales again. The company utilized a factoring facility in conjunction with a bank line of credit, but capacity of the facility was limited to a carve-out of two large debtors. Anticipated growth required additional financing capacity to fulfill new retailer programs and increased order commitments.
TradeCap Partners worked in tandem with a new factor and delivered a combined receivables and purchase order finance solution to the company. A four-party intercreditor agreement was established, providing carve-out of several additional debtors and collateral. TradeCap Partners’ facility included availability for issuances of letters of credit and payment against documents, satisfying the needs of multiple suppliers requiring pre-shipment financing or payment on terms. The facility also provided capacity for payment of freight, duties and tariffs.
With the new finance structure in place, the company increased availability and flexibility of its financing to accommodate future growth. The added capacity will also be instrumental in keeping goods flowing from suppliers and minimizing the impact of supply chain disruptions and stretched cash flow.
“We’re grateful for the opportunity to be working with this rapidly growing company,” Clinton Stanton, managing partner of TradeCap Partners, said. “The collaborative effort allowed for a seamless transition to a more beneficial finance structure, positioning the company well to execute growth plans and increase profitability.”
