A/R Financing – Consumer Product Displays

Product Line: Factoring Line

Funding
Line Amount: $400,000 (2 debtors, $200,000 each)

Company
Type: Consumer Products Displays for Point of Sale

Industry
Type:  Trade Displays

Revenue:
$737M (FY 2018); $5-$6MM (est FY2019)

Location:
Mexico

 

Industry

Our client, a Chilean company that operates in Mexico, creates point of sale
modular solutions that retailers can use to display products in their stores.
The company offers a system that allows retailers to create modular
displays using scrap materials. This innovative system allows users to generate
a variety of display shapes without having to buy separate products.  Its
parts and pieces can be assembled into different types of displays, which
ultimately saves money in display expenses and provides economic and
environmental savings. This is the first product improvement the display
shelving industry has ever had.

 

Challenge

The company is relatively small and new, having been founded in 2017.  It
sells its products to big corporations in Mexico that have long payment terms
(60-120 days), so it needs to improve its cash flow to maintain its growth and
would therefore benefit greatly from a factoring line.  It does not have a
long payment history as a young company, so payment assumptions have to be made
based on its debtors’ other clients.

 

Solution

Although the company is young, it has been able to create innovation in a category where
there was previously none.  Not only can the display materials be made
into various configurations by the retailer, but the shelves are also made with
recyclable materials.  The company operates as a commercial office and has
rapidly grown to become one of the biggest businesses in Mexico. It is already
showing an improvement in gross margin.  It has a broad portfolio of 22
customers, most of whom are large, recognized consumer corporations. While some
of its clients have long payment terms, it also has others with shorter payment
terms of 30 days.  There have been no liens or negative media exposure
found and its risk rating is low.

 

Benefit

ExpoCredit approved the company’s factoring line requests based on its rapid success in a
short amount of time.  Its ability to establish market leadership through
the creation of an innovative and unique product, as well as to acquire
numerous large customers, is impressive and reinforces its solid growth
potential.

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