Iron Horse Credit (IHC) and Alterna Capital Solutions (Alterna) announced the closing of a $3,000,000 stand-alone inventory revolving line of credit and $2,500,000 Accounts Receivable-based facility respectively to a century-old company engaged in the design, development and marketing of quality women’s footwear. The facility provided was used to pay off its current bank relationship and provide the company with additional working capital as the business impact of COVID-19 began to decrease.
As with most consumer products, the company’s sales have been shifting from conventional retail to ecommerce channels which required flexible advance rates on inventory. During this transition, the pandemic hit and caused the company’s sales to drop and orders to be postponed until early next year.
A reliable advisor in debt restructuring introduced IHC and Alterna to the transaction. IHC’s stand-alone inventory would provide higher capital availability to the client while leveraging both the on-hand and in-transit inventory, and Alterna’s specialty and alternative financing capabilities would provide quick access to more capital tied up in invoices. The client selected the IHC and Alterna solution, with higher advance rates than the company’s existing bank LOC, which the company will use to fund the purchase of materials for fulfilling new orders and to fuel growth. Working in parallel on their respective due diligence and in collaboration with the company’s incumbent bank, IHC and Alterna closed and funded the transaction quickly to meet all timelines.
“We are excited to provide the company with the working capital needed during these difficult times by leveraging both the on-hand and in-transit inventory,” stated Cesar Silva, Vice President of Business Development. “It was great to see both our team and our A/R partner work diligently to get the transaction over the finish line.”
“Even in a good year, growing small businesses seek access to working capital. Layering a pandemic on top of the market-wide gap in capital has only compounded the liquidity drought,” said Stan Carpenter, founder and President of Alterna Capital Solutions. “I’m pleased with my team’s performance in collaboration with the IHC team, and I look forward to seeing our mutual client strengthen and grow.”