Kitchenware Production Funding Case Study
SUMMARY OF SCENARIO:
• The client is a well-established smart and multi-functional kitchen gadget provider with more than 10 years trading.
• Their customers include large Australian department stores and other overseas distributors.
• Due to stellar growth their manufacturer stopped providing credit and required a payment guarantee before manufacturing further goods.
• AR Cash Flow helped the client by providing pre-manufacturing funding to the supplier.
• The funding will help the client fulfill massive orders and continue to grow.
THE DETAILS OF THE TRANSACTION:
This client was introduced to AR Cash Flow by our broker partner. After ten years of manufacturing premium kitchen gadgets, their Chinese supplier could not support the massive orders coming in and now demanded upfront payment to source materials for the production. It has now refused to offer the client credit terms right at the point when the client had expanded with huge orders coming in from customers.
In addition to the above funding problem, the fact that the manufacturing happens in China and goods are shipped directly to foreign customers in various locations such as in Hong Kong, Europe and North America makes it out of the scope of most Australian financiers.
After a detailed analysis, AR Cash Flow offered them a deal. We quickly understood that this was a sensitive time for the client and the client was in need of a timely solution.
The facilitty was structured as follows:
• The facility was partially backed by the client’s property security
• The payment to the supplier was secured by a Letter of Credit
• The client has absolute control of the whole shipment process
The solution provided by AR Cash Flow has helped the client to fulfil his customers’ massive orders. Not only has this helped the client to meet his customer’s needs, but has also helped him to free up capital to further his research and development to produce better products and continue to grow.
This transaction was structured by Leigh Dunsford at Stak. If you have a similar situation on your hands, please speak to Leigh on 0402383949.
Alternatively, you could also reach us directly by emailing firstname.lastname@example.org and we are more than happy to set up a quick chat.
Please see links below for our previous case studies
Electronic Bus Case Study
Glider Case Study
Wine Case Study
Modern PO Finance and Production Funding
Distressed Mortgage and livestock Case Study