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Rosenthal Provides $11.5MM Inventory Production Finance Facility for Apparel Company

February 10, 2022, 07:51 AM
Filed Under: Apparel

Rosenthal & Rosenthal compeleted a recent $11.5 million purchase order finance facility to support the production financing requirements of a Florida-based branded apparel company.
Rosenthal has known the company’s management team for nearly ten years from a prior relationship through the firm’s purchase order financing team. The company experienced explosive sales growth when it launched several new product lines in its men’s and women’s divisions and expanded its relationship with a major retailer, which created a significant concentration for the business. This rapid growth is transforming the business, with sales projected to increase from $40 million to more than $100 million within the calendar year. In addition, as a seasonal business, the company has longer lead times for production and shipping from its overseas supplier base. As a result, this incremental sales growth has created significant cash flow strain that could not be supported by the company’s financing arrangement with their existing lender, the factoring division of an international bank.  
Rosenthal was able to support the business by providing a multi-million dollar purchase order financing facility that involved the purchase of product from the company’s overseas suppliers, with funding through letters of credit and cash funding for fulfillment and logistics costs. Rosenthal’s advance rate was 100% on the cost of the presold inventory. Once the inventory arrives, clears customs and is distributed by a third-party logistics facility, the related sales invoices are funded by the factor and the Rosenthal purchase order financing is repaid.
“We’re thrilled to be able to help this company and their highly skilled management team capitalize on these exciting growth opportunities,” said Jennifer Draffkorn, SVP and Portfolio Manager for purchase order financing at Rosenthal. “This transaction is a perfect example of how Rosenthal values our deep relationships with clients and is representative of how many of our clients view us – as partners, not just lenders.”
“Rosenthal’s ability to offer creative solutions to clients seeking alternatives to raising more permanent capital makes us unique, and ultimately saves owners from further diluting their equity,” said Paul Schuldiner, Rosenthal’s Chief Lending Officer. “Purchase order financing is an excellent counterpart to factoring, and with our long history of working hand-in-hand with third-party factors, asset based lenders and banks, Rosenthal is well positioned as an effective partner in these types of transactions.”

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