TradeCap Partners recently closed a $500,000 production finance facility for a Texas based manufacturer of couplings used in oil and gas and industrial applications.

Key members of the management team had acquired the Company in the past 6 months and relocated manufacturing operations to a new facility. As the economy reopened, product demand increased and the Company received $2mm of purchase orders from existing customers. With only a factoring facility in place, additional capital was needed to purchase steel feedstock used in production. Recognizing the need, the factor turned to TradeCap for the solution.

TradeCap structured a production finance facility providing upfront payments to steel suppliers and advances for related manufacturing costs. The solution increased the Company’s availability threefold, allowing them to purchase more feedstock and operate closer to full capacity.

Throughput increased, accelerating fulfillment of the order backlog, resulting in higher net margins and profitability. Furthermore, in a time where supply chain bottlenecks and delays have caused strain between customers and suppliers, TradeCap’s solution solidified the Company’s relationship with customers as a reliable supplier while many competitors have been unable to perform.

Clinton Stanton, TradeCap’s Managing Partner remarked, “The flexibility of our purchase order finance offering, which includes production financing, is a key differentiator from competition. With many companies shifting away from reliance on suppliers outside the US, we expect to see more opportunities where we can partner with small and mid-size manufacturing companies to fulfill growth capital needs.”