ROSENTHAL PROVIDES $2MM PURCHASE ORDER FINANCE FACILITY TO A Beauty Products Company
Paul Schuldiner, EVP Division Manager, Jennifer Draffkorn, SVP, Senior Account Executive, and Megan Flaherty, AVP, Account Executive, recently completed a $2MM inventory production funding facility to a California-based cosmetic and beauty products company.
This transaction illustrates how Rosenthal & Rosenthal’s PO Finance Group, assists growth companies in structuring a more sound solution to dealing with the payment requirements of its international supply chain.
Deposits and advance payments to overseas suppliers are a much more riskier method of paying suppliers for goods. When faced with a dilemma of providing deposits or advance payments to suppliers in order to fulfill large sales orders, there is greater risk in losing control over the production of inventory. By using letters of credit, an importer has more control over the timely receipt of product as well as being able to impose pre-shipment inspection standards that reduce the risk of sub-standard product quality. Due to the requirements associated with a properly structured PO financing solution, a company can ship to its customer base on time and with greater assurance of superior product quality. As a result, dilution risk to a factor or an accounts receivable lender is also mitigated.