Factoring Case Study

Outdoor Apparel Company

Companies that have uneven annual business cycles often have borrowing needs that do not lend themselves to typical factoring programs. Factors which require minimum monthly volumes would hardly suit the needs of a company which imports and sells a seasonal apparel line. Because our programs are customized and flexible, Premier Trade Solutions, Inc., (PTSI) is able to meet the challenge.

In June 2010, PTSI was introduced to an outdoor apparel company in the western U.S. that imported and sold for the fall/winter season. The company had several years of performance, and was experiencing a season of rapid growth. The owners of this small, closely-held private company had created a fantastic niche in an extremely competitive market. Further, they had historically funded their growth through earnings with no debt.

As seasonal pre-sales began growing more rapidly from its existing customer base, not to mention sales to new customers, it became clear that funding from purely internal sources would no longer meet growth needs. In the first meeting, PTSI could quickly tell that the management was financially astute and open to suggestions as to how to best manage their borrowing needs. We put together a combination of Purchase Order finance and Factoring. Letters of Credit brought their product into the country. Factoring provided immediate cash flow from sales. We were even able to do some early financing on existing receivables to ease their cash flow needs.

PTSI provided a total financing solution for the company’s entire 2010/2011 fall and winter line. And, as the ultimate measure of our program’s success, the client has come back to finance their 2011/2012 season.