Product Line: Factoring Line
Funding Line Amount: $400,000
Company Type: Fresh Produce Exporter
Industry Type: Perishables
Our client is a fresh produce distributor with sizeable contracts in the retail market in Peru and abroad. There are two ways the company conducts business. It acts as an intermediary between the agricultural producer and the retailer, connecting them and then collecting a fee for brokering the deal. The company also acts an exporter whereby it receives an order, purchases fresh fruits and vegetables from the agricultural producer and exports them in a traditional way to the retailer. The company has been able to effectively take advantage of the unique variety of produce available in Peru to establish relationships with customers in other countries.
Cash flow was an issue for the company because its debtors can take up to 90 days to pay their invoices. Additionally, the company’s annual gross margins are variable because these are largely dependent on the type of business it is doing from month to month (intermediary vs. direct buyer).
The company is successful despite only being a few years in the market. It has a strong client portfolio of large, well-known retailers and has maintained high gross margins with a very simple operating structure. Additionally, it does not carry any inventory because it either acts as a broker or it purchases product directly against a confirmed purchase order. The company has positive equity and good payment history. Based on the company’s successful, low-risk business model, ExpoCredit was able to grant the company’s request for a factoring line of $400,000.
Thanks to ExpoCredit’s faith in this young company, it now has the cash it needs to grow and continue conducting business as both a broker and a direct buyer for its large clients.
ExpoCredit helped this company increase payment terms to its primary customer.
ExpoCredit is helping this company with the working capital needed to manage seasonality
ExpoCredit helped this company to have the working capital needed to operate according to its demand