With the help of TradeCap Partners, a provider of new and used equipment to big box retailers spread across the United States and Canada has closed a $7 million purchase order funding facility. For the purpose of guaranteeing payment to the company’s international suppliers for the direct cost of goods, TradeCap’s facility consists of cash payments against shipping papers and documentary bank letters of credit.
Due to longer lead times and quality problems the retailer was having with other suppliers, a large multi-national retailer recently granted TradeCap’s client significant orders for equipment utilised by customers in stores across the United States. The orders called for equipment to be supplied over a four-month period in an amount more than the client’s sales from the previous year. The customer of TradeCap arranged for two international suppliers to collaborate and produce the goods in order to stick to the retailer’s delivery timetable. However, the overseas suppliers were hesitant to offer favourable payment conditions due to the volumes that needed to be manufactured.
The client’s bank, which had a borrowing base line of credit in place backed by receivables, recommended TradeCap to them. Even though the bank had agreed to expand the line in anticipation of more sales, it was unable to handle the client’s pre-shipment working capital requirements connected to suppliers’ on-time manufacturing and delivery of goods. Fortunately, TradeCap and the bank had a history of working together and had successfully assisted other companies with comparable requirements.
The bank understood TradeCap would be able to execute swiftly and realised it needed to provide its client the flexibility to seek an urgent solution to keep the relationship. The bank also gave its client advice on the structuring process.
According to TradeCap’s managing partner Bryan Ballowe, “This is a terrific tale and exciting connection for TradeCap to start in 2023. It emphasises the advantage TradeCap’s Purchase Order Funding solution offers to clients looking for additional capital to seize big sales opportunities as well as to its partners in the asset-based lending and factoring sector. Our referral sources rely heavily on us to complete tasks promptly and competently and use Tradecap as an extension of their very own product offering. We take pride in the fact that our referral sources can depend on us as a reliable and essential partner repeatedly and with confidence.