TradeCap Provides a $1,500,000 Purchase Order Facility for a Southwest U.S. Promotional Products Company

TradeCap Partners, LLC (“TradeCap”) recently announced the closing of a $1,500,000 trade finance facility for a promotional products importer located in the Southwest.  The company had experienced sizeable growth in fiscal year 2019, financed primarily with the help of favorable payment terms with its overseas supplier and a long standing factoring relationship. Growth in 2020 started out strong with performance exceeding projections.  However, as the pandemic began to take hold, the company’s customers delayed and in some cases suspended purchase order delivery dates until they were able to reopen doors.  This resulted in significantly reduced cash flow, prohibiting the company’s ability to stay within payment terms extended by its primary overseas supplier.    

When TradeCap was introduced to the client by their factor, the supplier was demanding payments be made for product already shipped before they were willing to ship additional product or start new production.  As customers began reopening, the client needed a solution to ensure additional product would ship and production would stay on schedule to meet demand.  TradeCap and the client quickly identified inventory located in domestic third-party warehouses supported by customer purchase orders to provide availability and allow TradeCap to administer payment to the overseas supplier to curtail past due accounts payable.  TradeCap also structured future payments to the supplier on a ‘Documents upon Presentation’ basis for additional presold goods once produced and shipped.  The solution shortened the payment cycle to the supplier and ensured goods would ship on time. 

TradeCap provided the solution the company was seeking in order to prime the pump as customers began reopening and scheduling deliveries.  Once goods financed by TradeCap were delivered and invoiced, the company utilized its factoring facility to repay TradeCap’s pre-shipment financing and provide additional working capital the company needed to keep the supply chain moving. 

Bryan Ballowe, Managing Partner of TradeCap Partners commented, “To say this has been a challenging time for all of us is quite an understatement.  Few businesses have been immune to this horrible pandemic.  Being able to move quickly and creatively for our clients is a challenge all finance companies should meet head on as we continue to work our way back to a sense of normalcy.  We are fortunate we were able to do our part for our client.”