King Trade Capital Presents at CFA Conference / Finances Multiple Apparel Companies

Tuesday, June 7, 2011

King Trade Capital presenting at Commercial Finance Association’s Entrepreneurial Finance & Factoring

Bryan Ballowe, Vice President and COO of King Trade Capital has been asked to be a panelist at the CFA Entrepreneurial Conference in Dallas this week. The panel is entitled “Market Segment Update: Transportation, Government, Purchase Order Finance and Staffing,” which will address how each of these market segments may be a barometer or an early warning of where the economy is heading. Bryan and the other panel members will discuss the current business environment and where these segments are headed relative to business activity and opportunities. The panel is touted by the CFA as, “A look into the crystal ball at these market segments and the credit demand with these segments.”

GO TEAM! Collegiate Licensed Apparel

King Trade Capital was recently contacted by a factor trying to win a new client. The factor recognized the prospect had excellent potential for growth and that PO financing would help augment their offering and win the client’s business.

The client is a relatively early stage apparel company selling collegiate licensed apparel to several established national campus bookstore chains. The client received several purchase orders to initially test their items in regional stores. The bookstore chains sold through the apparel much faster than anticipated and immediately opened up conversations with the client to expand the clothing line and the quantities purchased into large national programs.

The client’s hard work in developing its apparel designs and quality along with cultivating the relationships with its customers had now paid off. The only thing separating them from the opportunity to significantly grow their company was a limited balance sheet to support the future growth. King Trade Capital came up with the perfect import finance solution.

When introduced to the client, King Trade Capital issued a proposal and upon acceptance immediately moved forward with due diligence. In the meantime, the factor was able to establish their relationship with the client and provide liquidity on the existing receivables of the client allowing them to fulfill their initial orders, which was a win-win for the client and the factor.

However, as the factor and client had predicted, the rapid sales growth came quickly as the client and its customers solidified a national rollout plan which included additional clothing lines and increased quantities. The large orders led to much larger letter of credit needs in order to manufacture and import the inventory necessary to fulfill the orders.

Working in conjunction with the factor, King Trade Capital issued letters of credit to a factory in Sri Lanka to support the production of the goods that would be needed to fulfill some $500,000.00 of initial new orders. As goods arrived in the U.S., King Trade Capital worked with the company’s freight and logistics provider and made payments for related freight and duties. As a result of the funding, the client was able to grow their existing apparel supply program and expand their product offering into additional college campus bookstores across the country.

King Trade Capital now has a facility in place to support any future sales opportunities as the client continues to grow its business. Thanks to the historical relationship between King Trade Capital and the factor, together they will enable the client to reach its full growth potential.

Apparel and More Apparel

Recently, another apparel company faced with a challenge approached King Trade Capital for a solution. This established company, having been in business since 2005, had historically financed all sales using the owner’s capital and cash flow of the company. This structure had worked well for the company through FY 2010. However, in 2011 business was growing and the company received a $1.1 Million order from their main customer. This single order represented a sale that was larger than what the company could finance.

The owner’s capital was already deployed for production being completed to fulfill the normal day to day orders, leaving him in search of capital. King Trade Capital stepped in and provided a $650,000.00 LC to the overseas supplier who produces the majority of the company’s goods and also carved out additional funds to pay for the related freight and import duties. We provided the excess capital to the client so they could fulfill the largest order in company history.

The buyer for the major retailer has seen that the KTC client was able to perform and fulfill the larger order and has approached them with new business opportunities of similar size, putting the company in a favorable position to exponentially grow the top and bottom lines of their business without having to give up equity or control to new investors.