TradeCap Partners closed a $2.8MM Purchase Order Finance Facility for an apparel importer located in the Pacific Northwest.
The Company was seeking financing to support large, sporadic orders they started receiving from a longstanding customer. While positive for the company, the orders spiked cash needs associated with producing and paying for goods from suppliers. Terms with overseas suppliers required deposits to commence production with balance payments due following shipment. The Company’s factoring line provided adequate liquidity to make the deposits but there was insufficient cash flow to make balance payments. The size of the orders required multiple container shipments, further compounding the need for additional liquidity to keep the factory within terms over the course of the shipping schedule.
The company’s existing factor referred TradeCap to provide the in-transit inventory finance solution the client needed. TradeCap established a PO Facility using a Documents against Payment structure to support the additional in-transit financing needs. The facility provided availability to cover the remaining 70% balance payments due to suppliers upon shipment. TradeCap also provided the company availability under its facility to cover freight and import duties. Closing and funding of the facility was expedited and completed in just 5 days.
TradeCap’s PO facility alleviated the cash flow needs of the Company and is now in place to support future orders from their longstanding customer.