TradeCap Partners secured a $625,000 purchase order finance facility to an early stage, New York-based cosmetic company.
The facility will be used to support large orders for multiple SKU’s to a subscription box provider.
The orders presented the company with an opportunity to grow sales and increase brand exposure. However, the company’s balance sheet and cash flow could not support the size of the capital need to manufacture goods and pay for packaging, fulfillment and logistics costs.
The company also found it difficult to secure a relationship with a freight forwarder and fulfillment company that would provide the necessary services due to the lack of credit history and capacity relative to the costs associated with the orders.
Initially, the company contacted a factor they found online. The factor felt the company could benefit from a P/O finance solution and brought in TradeCap.
TradeCap’s P/O facility provided 100% of the financing for the goods, packaging, freight and fulfillment. A letter of credit was issued to the overseas supplier to support production of goods, and packaging suppliers were paid within agreed upon terms.
TradeCap also contacted the freight forwarder and fulfillment company on behalf of the client and negotiated a solution for payment of air freight and fulfillment costs, rounding out the finance solution.
The company used the facility to capitalize on the large growth opportunity instead of having to forgo sales.
