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King Trade Capital Provides $1MM Supply Chain Finance Solution

March 22, 2013, 07:07 AM
Filed Under: Purchase Order Finance

King Trade Capital (KTC) established a $1 million supply chain finance solution for a fluid pump designer and importer. KTC’s facility will allow the client to fulfill a six-figure backlog of orders and the ongoing relationship will allow the client to double monthly sales by financing payments to multiple international suppliers.

KTC was introduced to the client by their current asset-based lender when the lender recognized the client’s growing backlog and their need for additional capital over and above what the ABL facility provided.The client’s growth was so exponential the ABL inventory advances could not provide the cash needed in advance of delivery of inventory to the client’s warehouse. The timing of availability and low advance rates for inventory on hand was not providing the capital the client needed to keep the Asian suppliers paid and the flow of finished goods moving. The limited inventory financing was slowing deliveries and increasing the back log.

KTC offered a solution utilizing the purchase order backlog and sales history to fund the purchase of more inventory from overseas. KTC established an inter-creditor with the ABL, who subsequently converted to a straight A/R facility as KTC stepped in to provide an inventory finance solution offering higher advances on inventory and providing availability prior to delivery to the client’s warehouse.

Now with KTCs facility in place, the client no longer drains their cash flow and ABL availability to make payments to the supplier(s) prior to goods arriving from Asia. KTC’s facility advances up to 100% of the FOB cost of goods upon shipping from Asia, whereas previously the client had a lower advance and could only utilize funds upon arrival of inventory at their facility.

King Trade Capital is the country’s oldest and largest independent purchase order and contract finance company.

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