Small business owners who are working hard to grow don’t always get to decide what opportunities come their way, or how big those opportunities are.
While receiving a huge one million dollar purchase order from a big box store sounds like every entrepreneur's dream, it can also put the business in a crunch. That was the case for a sporting equipment manufacturer with $350,000 in annual revenue.
Fortunately, Barrington came up with creative commercial capital solutions and was able to say yes to this client.
Large retailers demand high production capacity and expect manufacturers to offer unrestricted inventory availability. To deliver, the sporting equipment manufacturer needed:
The company couldn’t afford to wait 30, 60 or even 90 days to get paid. And like many entrepreneurs, the owners of this small business were hesitant about taking on traditional debt.
Through Barrington Commercial Capital, the company secured a line of credit structured around the purchase order. This allowed it to access cash immediately and bridge the gap until the retailer paid.
The funding included:
The client avoided taking on long-term debt that would be restrictive or burdensome. At the same time, it gained liquidity to hire additional employees and purchase materials in bulk.
This sporting equipment manufacturer scaled its operations confidently and delivered on time to a national retailer, opening the door to similar large-scale transactions.
In this case, timing was everything. Stalling the big box store was not an option. However, traditional banks often struggle with fast-moving growth scenarios.
Asset-based solutions like equipment funding and purchase order financing are designed for moments exactly like this. The approval process is largely based on the strength of the PO and receivables.
The risk-averse manufacturer initially resisted the idea of financing. But what’s riskier? Passing on a $1 million order that could transform the business. Asset-based funding minimized the client’s exposure while allowing it to seize this chance for growth.
At Barrington Commercial Capital, we develop creative deals that involve AR financing. Our team thinks outside the box to get deals done.
Contact Barrington Capital to see how our innovative financing team can prepare your business for its big break.
