TradeCap Partners closed a $2 million purchase order finance facility for a food ingredient supply company in the Western U.S. The facility will be used to support distribution of bulk and specialty products domestically and internationally.
The company’s management team had more than 50 combined years of industry experience with relationships spanning the globe. A strategic plan was devised to expand sales in the U.S. and abroad. The company initially approached their credit insurance broker to establish a policy that would support the expansion by reducing credit risk and provide an enhancement to lenders. The insurance broker introduced TradeCap as a partner with a solution to assist in scaling sales at a faster pace than what their current balance sheet could support.
TradeCap established a purchase order finance facility providing availability against both domestic and foreign customer orders. The structure included sublimit availability to pay for value-add blending, inland and export freight costs. TradeCap’s facility was paired with a receivables line that provided liquidity following shipment and delivery of goods to customers.
The facility will aid the client in rapidly growing sales without constraints imposed by more traditional structures that include covenants and concentration limits on foreign receivables. The added leverage provided by TradeCap’s purchase order facility aligned with management’s strategic plan and served as the solution to support expansion efforts.
