Rosenthal Provides $500,000 Production Finance Facility for California-based Cosmetics & Beauty Products Company

Rosenthal & Rosenthal, Inc., the leading factoring, asset-based lending and purchase order financing firm in the U.S., today announced the completion of a recent $500,000 purchase order finance facility to support the production financing requirements of a California-based cosmetics and beauty products company.

Rosenthal was introduced by a large national bank to a well-known beauty and wellness personality with a large social influencer network which helped build a strong and successful direct-to-consumer beauty business. As the company grew, two large e-commerce subscription box retailers were interested in having the brand develop an exclusive line of cosmetics for their distribution channels. Although it was a sizeable sales opportunity, one that the company did not want to pass up, the scale of the orders in addition to the shipping schedule required by the retailers, led to production capacity and cash flow challenges. The company’s overseas suppliers were requiring a deposit to start production as well as payment before delivery. All of this was further complicated by a merger between the two subscription box retailers, which occurred during the underwriting process.

Rosenthal’s highly experienced PO Finance team negotiated with the overseas supplier and was able to successfully restructure the financing requirements to create a much sounder solution that benefited all parties in the transaction. Documentary letters of credit were used to fund the purchase of product from the company’s overseas supplier, enabling the supplier to obtain its own financing to procure the raw materials and fund all production costs. Cash funding was also provided for fulfillment and logistics costs. Rosenthal’s advance rate was 100% on the cost of the presold inventory. Rosenthal’s purchase order financing facility allowed the company to fulfill the sales program and deliver the products on time to the retailer.

As part of the deal, Rosenthal brought in a third-party factoring company with significant experience working with subscription box direct-to-consumer retailers. Working with the third-party factor accelerated the cash flow cycle of the transaction because the factoring solution created access to additional liquidity for the company over and above the repayment of the purchase order financing provided by Rosenthal.

“Rosenthal is committed to expanding our production financing program for companies operating in the cosmetics, beauty and wellness segments. This particular transaction allowed our client to fulfill orders from what ultimately became a single large subscription box company, an extremely fast-growing retail distribution channel,” said Rosenthal Division Head Paul Schuldiner. “By partnering with Rosenthal and a third-party factor, our client benefited from our knowledge of financing international trade, along with the factor’s knowledge of the end customer’s payment practices and history. Working in tandem, we were able to offer the company a platform to exponentially grow its business with this new customer and future customers, an end-to-end supply chain financing solution that was a win-win for all parties.”

For more information about Rosenthal and this transaction, please visit www.rosenthalinc.com and contact Paul Schuldiner at 212-356-1703 or PSchuldiner@rosenthalinc.com.

ABOUT ROSENTHAL & ROSENTHAL

Rosenthal & Rosenthal (www.rosenthalinc.com) is the leading factoring, asset based lending and purchase order financing firm in the United States. Founded in 1938 by Imre J. Rosenthal, the firm is now led by the second and third generations of the Rosenthal family. As a privately held company, Rosenthal is committed to providing personalized service and flexible lending to clients across a broad range of industries. Rosenthal has offices in New York, California, Georgia and North Carolina.