Frozen Foods Manufacturer and Supplier: Purchase Order Financing and Factoring Facility Case Study

This Client is a family-owned and operated frozen foods manufacturer headquartered in New York.  They offer a full line of convenience products, which includes an extensive line of appetizers/ hors d’oeuvres, pre-plated meals, gluten-free certified, vegetarian, bulk entrees, breakfast products, crepes, and blintzes.

Background:

  • Formed in the 1970s, the company is a nationally recognized leader in the production of high-quality, kosher endorsed (OU Kosher Certified), frozen foods products.
  • The Client manufactures under its own brand as well as private label which are distributed to all major renowned discount warehouses based in the United States.

Company Challenges:

  • This company is well established and has a well-deserved reputation however they were struggling to make timely payments to vendors due to working capital constraints imposed by their existing bank facility.
  • The Client’s growth significantly outpaced its ability to leverage its balance sheet and cash flow.
  • They were unable to meet the growing demands of their major customers using their bank sponsored ABL Facility.

Capstone’s Solution:

  • Provided a seven-figure Master Factoring Facility and a Purchase Order Facility.
  • Opened ad-hoc Letters of Credit for the purchase of new equipment.

Progress and Future Outlook:

  • Since the commencement of the relationship back in 2019, Capstone has purchased $72 million in total sales.
  • Cash flows and business operations were stabilized through the uncertainty of the COVID-19 pandemic.
  • Cash flow constraints were eased resulting in the Client meeting/surpassing order demand from all major customers.
  • The Client has found Capstone to be flexible, practical and knowledgeable about their industry; Capstone took the time to understand their business needs and provided a customized funding solution.

 

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