King Trade Capital announced it has established a new $7 million Purchase Order funding facility for a technology hardware distributor headquartered in Virginia. 

The company had experienced rapid growth due to a variety of customers upgrading their technology infrastructure. They were seeking a finance solution to help grow sales that could not be supported by their existing bank facility due to balance sheet constraints.

The client’s initial finance need was tied to a $6.5 million purchase order received from a U.S. based subsidiary of a Japanese telecom company.  The order was part of a larger directive to supply mission critical computer equipment to various end customers throughout the United States.  

KTC’s client had the connections and expertise to execute on the orders but lacked the necessary balance sheet and credit to acquire the hardware needed to fulfill the order from their customer and continue to grow their business.  

The client had an existing bank relationship but the credit facility was fully utilized and not large enough to accommodate the company’s growing funding needs.  Additionally, the company’s supplier required immediate payment in order to secure the allocation of equipment and guaranty timely delivery to the client’s customer.

KTC was able to underwrite and provide the company’s finance solution within a matter of days with a creative structured direct payment arrangement with the supplier that allowed the client to obtain an allocation of equipment to ensure timely deliveries to the end customer. 

KTC’s solution is being provided in tandem with a national factoring company that will advance on the resulting receivables once all equipment has been shipped and delivered to the end customer locations.  

Deliveries are currently in the process of being completed and additional production is scheduled to be shipped to the customer in the coming weeks to satisfy the order.  Upon shipment and invoicing, KTC will be paid from the advances by the factoring company and excess availability will be sent to the company for liquidity purposes. King Trade Capital’s finance solution will provide the client additional credit capacity to take on larger opportunities they previously have been unable to fulfill.