TradeCap Partners closed a $1.4 million production finance facility for a Texas based, minority owned consumer packaged goods company.

After many years in the food and beverage industry, two industry veterans with combined experience in sales, operations and supply chain management joined forces. In less than 12 months, they landed their first large wholesale account for their tasty snacks. Having capitalized the company primarily with sweat equity and a small friends and family round, the founders were in search of non-dilutive capital to support the wholesale launch.

Their banker advised the company Purchase Order Financing would be the best option given the size of the capital need and desire to maintain their current equity stake. The founders were introduced to TradeCap for the solution.

Confident in the experience of the management team, TradeCap vetted the company’s ingredients and packaging suppliers as well as the co-packer. Deposits were paid to packaging and corrugate suppliers ensuring timely delivery to the co-packer based on lead times and paper shortages. Ingredients were paid for and payment terms were extended by the co-packer based on TradeCap’s prior history working with them. TradeCap’s facility provided availability for 100% of the costs to fulfill the launch, including outbound freight to the wholesaler.

The relationship with TradeCap helped the company successfully launch with the wholesaler and achieve their goal of securing non-dilutive capital to preserve long-term value for the two founders.
 
“We’re extremely excited to partner with these two experienced founders that took the entrepreneurial leap”, said TradeCap’s Managing Partner, Clinton Stanton. “Our purchase order production finance solution was a perfect fit that aligned the type of capital with the transactional need and the founder’s objectives. We look forward to supporting their continued growth and expansion.”