King Trade Capital Assists Start Up with $1,000,000 Supply Chain Finance Solution

Wednesday, October 14, 2015

King Trade Capital is pleased to announce it has established a $1 million supply chain finance solution for a Texas based startup ("Client"). King Trade Capital was contacted by a nationwide factor to help accelerate the startups sales growth in the apparel industry.

The owners of the startup have extensive relationships with small to mid-size retailers and years of experience sourcing goods from overseas factories.  Through their relationships in the apparel industry they were able to secure annual production programs to manufacture branded goods on behalf of several men’s and women’s brands.

Due to the fact the Client was a newly established entity with no financial or operating history, they were unable to obtain funding through traditional financing sources.  The Client was in need of a financial partner capable of providing the capital and structure necessary to have fabric sourced and garments manufactured overseas.

Initially the Client’s factories wanted cash deposits in order to purchase fabric that would then be cut and sewn into finished garments. Payment for the cut and sew operations would then be due upon shipment. The owners, knowledgeable of the risks associated with sending cash deposits overseas, were seeking a safer solution to finance their inventory purchases. 

King Trade Capital evaluated the experience of the owner’s and their customer and factory relationships, ultimately gaining comfort in their ability to perform. After negotiating with the factories, King Trade Capital and the Client were able to structure individualized solutions for each factory, utilizing letters of credit that allow them to purchase fabric, complete the cut and sew manufacturing process and get paid according to their terms with the Customers.

King Trade Capital’s $1 million supply chain finance facility provides the Client with a less expensive alternative to raising equity allowing this startup to grow through increasing sales. The Client can now focus their attention on growing the number of SKU’s they manufacture for each retailer as well as expanding their customer base.