King Trade Capital Provides $1,750,000 Purchase Order Finance Facility for a California based Company

Sunday, February 7, 2016

King Trade Capital is pleased to announce the recent funding of a $1,750,000 million purchase order finance facility for a California based importer of wireless climate control devices.

King Trade Capital was contacted by an asset-based lender in order to help an existing client with a liquidity need spurred on by a newly secured master supply agreement (“MSA”) with one of their major customers.

The company was in need of additional liquidity since they did not have availability from their ABL facility nor sufficient open credit with their major overseas supplier. The clients challenge was that they had worked for a long time to grow their relationship with their end customer but due to lack of traditional collateral they could not order or purchase the necessary inventory needed to fulfill the initial order under their new MSA.

King Trade Capital quickly worked in conjunction with the company and the asset-based lender to create a finance solution that leveraged King Trade Capital’s expertise in funding international inventory purchases along with properly structured financing of in-transit inventory. This entailed issuing letters of credit in lieu of cash deposits, alleviating the risk of providing unsecured financing to overseas factories in the form of cash deposits, and serving as a payment guarantee to the supplier. King Trade Capital established an inter-creditor agreement with the asset-based lender, who is advancing on the accounts receivable, enabling a seamless supply chain finance solution to be put in place quickly.

The company now has two of the best finance partners working together to achieve a common goal of fulfilling and supporting sales growth. King Trade Capital’s unparalleled experience in providing an import finance solution by supplying incremental capital benefitted the company’s sales, its asset-based lender increased accounts receivable volume, and the overseas supplier gained assurance of timely payment. Most importantly, the client can increase its sales profitably under the newly secured MSA and has confidence that they have a finance facility that fully supports them when they accept additional contracts and orders from new and existing customers.

King Trade Capital is the country's oldest and largest independent provider of purchase order and contract finance for small to middle-market companies in the U.S., UK and Canada. Since 1993 KTC has provided more than $2 billion of capital in over 350 public and private companies worldwide.