Wednesday, October 15, 2014

King Trade Capital (KTC) is pleased to announce the recent funding of a $1 million purchase order finance commitment for a Washington-based designer and importer of specialty cooking tools. After raising some initial capital from family members, this rapidly growing importer started landing a series of increasingly large orders from specialty stores and online retailers. This success created a dilemma for the management team who had to decide whether to raise more equity (which would dilute their ownership stake) or seek alternative financing.

KTC was introduced to the company by a factor to help provide a finance solution. The factor worked to approve the credit of the end customers who were providing larger orders. Sensing a liquidity challenge due to the size of the orders, the factor recommended purchase order financing as a method for the company to pay its overseas suppliers. KTC was brought in to offer a solution that would integrate purchase order financing with the factoring. KTC quickly established a facility that provides financing with an advance rate of 100% of the cost of the required inventory in transit by making payment against documents to the company’s overseas suppliers. Funding for the freight, duty, and logistics costs were also provided to cover the complete supply chain finance requirements of the company.

The quick response by KTC, including introduction to a factor with whom an established inter-creditor agreement was already in place, allowed the company to finance the entire supply chain and fulfill immediate orders.  As a result, this enabled the company to be in a solid financial position to substantially increase its business with its growing customer base.