King Trade Capital announced the recent funding of a $750,000 purchase order facility for a small California based importer and wholesaler of electronics and related accessories. The company is experiencing excellent growth due to the fact their products are endorsed by several notable celebrities.
The recent buyout of a partner in the business resulted in a more thinly capitalized company and a shortage of liquidity to fund continued growth. After pursuing several larger retail chains, the company landed some large sales programs that require an increased level of inventory financing to fulfill the growing orders. After evaluating the various types of capital available, including equity, which would dilute the remaining shareholder, the company’s consultant referred King Trade Capital to assist in crafting a complete supply chain finance solution.
The solution consisted of a combination of issuing letters of credit to certain overseas suppliers prior to them beginning production as well as cash funding of inventory in transit to other suppliers at a 100% inventory advance rate. In addition, King Trade Capital’s facility included the ability to fund the cost of related freight, logistics and warehousing associated with importing the inventory.
Once the pre-sold inventory financing solution was established, King Trade Capital then brought in a factoring company as part of the total finance solution. The receivable factoring component provided the company additional liquidity once the goods were shipped and delivered to various retail customers.
King Trade Capital’s tailored solution alleviated the capital and liquidity constraints of the small growing company allowing them to execute their growth plan and set a course for continued success.
King Trade Capital is the country's oldest and largest independent provider of purchase order and contract finance for small to middle-market companies in the U.S., UK and Canada. Since 1993 KTC has provided more than $2 billion of capital in over 350 public and private companies worldwide.