Case Study - always be remarkable.
Illustrated below is a customized funding solution designed specifically for an electronics distribution client!
Situation: A start-up distributor of electronic component parts began operations by selling hard-to-find replacement parts to small and medium sized manufacturers. After a short period of time, they began obtaining larger orders from Fortune 500 companies. The owners were successful in raising some money to help support this growth, but their growth was quickly constrained because suppliers needed up front payments and the Fortune 500 buyers demanded 45 to 90 day terms of sale. This situation required working capital to continue the growth of the company.
Solution: We provided an invoice factoring credit facility to immediately release the cash they had tied up in their receivables. Next, we created a vendor payment guaranty program with several suppliers, which allowed them to purchase parts on credit with favorable terms. We also provided a Purchase Order Funding credit facility to assist with the purchase of parts from foreign manufactures. The initial $400,000 invoice factoring credit facility provided is designed to grow as their client grows.
Result: With the $400,000 credit facility, the vendor payment guarantee and the Purchase Order Funding facility in place, the Electronic Components Distributor is now able to take on larger orders, purchase from suppliers with favorable terms and purchase from foreign suppliers who may be able to provide better pricing.
The Electronic Components Distributor can now accelerate their growth without concern for financing the future.
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