Company: Importer / Distributor
Problem: This company had to turn down large orders from its customers (End-Buyers) because they did not have the capacity to purchase the goods. The company’s Factor only advanced funds when the goods had been produced, invoiced and shipped to the End-Buyers. The Factor did not address the initial problem of purchasing the goods.
Solution: Ashford Finance funded 100% of the cost of the goods against the Purchase Orders. This enabled the company to do more business and take on larger orders. In addition, more funds were advanced against the accounts receivable (Factoring). Ashford financed this company for their full cycle, from the purchase of the goods to the financing of the receivables. By financing 100% of the costs for the full cycle, Ashford provided the apparel company with a platform for rapid growth and stability. The additional sales gained with Ashford’s funding would have otherwise been lost.
Example: P.O. value = $200,000
Cost of the goods = $100,000
- Provided this company 100% of the $100,000 and more (freight, customs, etc)
- Advanced additional $50,000 on the invoice that was utilized to cover day-to-day operations
- Allowed the company to generate $100,000 additional sales giving the company $430,000 incremental income that would have been lost
- Provided transactional equity financing that allowed the company to grow without any capital constraints
Company: US flavored bottled water company that bottles through third party bottling company and sells domestically to large retailers.
Industry: Specialized Bottled Water
Problem: The company is getting large orders for its bottled water but does not have the funding to buy the specially designed bottles from one supplier, the flavor from another supplier, and bottle them in a third bottling plant.
Solution: Ashford Finance issued a transferable irrevocably US domestic Letter of Credit in favor of the large bottler who then backed by the Ashford Letter of Credit ordered the bottles, the flavor and then bottled the products and immediately got paid by Ashford as soon as the goods were shipped from the bottling plant.
- Provided the company 100% funding for the production all the bottled water it had sold.
- Allowed the company to triple its sales in a few months.
- Provided transactional equity financing to grow without capital constraint and without any loss of equity.
Company: The company buys specialty chemicals from China and sells them to European buyers.
Problem: Has a factor who does not want to advance against foreign receivables and when they do the advance rate is very low. As a result the company has been missing out tremendous growth opportunity.
Solution: Ashford not only advanced funds against foreign receivables but also financed the purchase of the chemicals before the receivables were created. The company very quickly doubled their sales and opened up new foreign markets.
- Provided 100 % funding to purchase the raw material and also carried the foreign receivables.
- Allowed the company to increase sales and to open up new foreign markets which the old finance company could not do.
- Provided transactional equity to grow without any equity loss.
Company: The company has a patented painting technique which is used on different home utensils.
Industry: Home and Kitchen utensils.
Problem: Though the company has grown a lot, they had spent lot of money on product development and expensive personnel. The company’s bank, impressed with company’s potential provided a working capital line of credit which was mostly used up. The problem was that line could not be paid down as it was funding permanent needs rather than short term working capital needs. When the vice president of the bank handling the account left the bank, the new account executive did not want to lend any more and wanted to be paid down. The dilemma for the bank was that the company, in addition to the amount already borrowed, needed significant transactional funding to satisfy the orders it was receiving. If the bank did not provide the new funds the company would go under.
Solution: The bank contacted Ashford Finance who provided a line of credit to purchase new goods. This allowed the company to grow out of the liquidity trap. With new transactional equity from Ashford, the sales and positive cash flow grew very quickly. Part of the excess cash generated was used to amortize the bank loan. Once the bank saw its loan being paid down, they became less nervous. The company using Ashford Finance’s unique funding very soon out grew its sales forecast and became a very desirable borrower of the bank.
Contact Ashford Finance if you need funding and cannot find a suitable financing source.
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