While brick-and-mortar retail is clearly in crisis-mode, Ballowe
sees an opportunity for TradeCap with online retailers.
“Amazon is an amazing conduit for suppliers,” he points out.
Many of the items sold using the Amazon platform come from smaller
retailers utilizing Amazon’s fulfillment services. “Finance companies
continue to provide the best service possible to keep inventory levels
at the peaks where you know demand is being met. So that offers a lot
of potential for companies like ours to be able to provide a solution for
those businesses selling online. We are able to not only help them grow
the business, but we are able to provide a lot of unique solutions out
there that may have not otherwise been readily received.
“Being able to think outside the box and provide as many solutions
as we can to help our clients continue to grow. I think that’s going to
be a goal for us.”
Because this type of financing is transactional, offering speed and
flexibility in customer service as well as developing excellent relation-
ships with senior lenders and other industry partners are critical.
“We try to develop a rapport on the front end with our potential
clients and industry partners and really make sure we ask all the right
questions,” Ballowe says. “Okay, there’s a risk here. There’s a potential
issue there. But you know how to address that for the client. Purchase
order finance is transactional. We know we’re not long-term capital
providers like a bank or an asset-based lender may be. So, it’s our job
to make sure we can move quickly and structure a solution that helps
best serve our clients as quickly as we possibly can.”
Developing Customer Relationships
“When you develop that relationship, people do come back. We’ve
seen over the years where an ongoing relationship has been estab-
lished. A lot of times clients like the ability to know ‘Hey I have a good
partner behind me.’”
Ballowe says clients appreciate that he and Stanton understand
their business and enjoy working with them.
“Even though they could maybe go out and find more traditional
financing, they kind of like where they are and the flexibility. They
understand what the financing is going to cost them, but they know we
can execute, and they don’t have to worry about that.”
Stanton emphasizes TradeCap is looking to be a valued partner for
other lenders as well.
“We want to be a trusted partner whether it’s a bank, ABL shop or
a factor,” he says. “The sell for us is ‘Let us be your partner in providing
this auxiliary product or service offering to your clients.’ They can
approach clients and offer to deliver and execute on a full working
capital solution, including purchase order financing. They can tell their
clients TradeCap is their partner and will help them provide a total
financing solution.” abfj
NADINE BONNER is editor of ABF Journal.
After working for a bank he describes as a “ 3,000-pound
gorilla,” Stanton was ready to make a change.
“I wanted to do something more entrepreneurial,” he says. “I
feel like you get a better sense for all the inner workings of a busi-
ness with a smaller company, and that was appealing to me.”
Of course, if you are entrepreneurial, the end game is
owning your own business. So, last summer, the pair decided to
plant a stake of their own. Stanton and Ballowe had the requi-
site finance experience and connections with industry partners.
They were able to raise capital privately, develop a banking rela-
tionship and get into the market. TradeCap Partners specializes
in providing alternative inventory finance solutions through
purchase order, supply chain and trade finance.
Filling the Void
“It’s not just a straightforward ‘Hey we’re financing finished
goods transactions going from one supplier from point A to
point B’. We will step in and provide several types of transactional financings including those involving multiple suppliers
and production financing. Often there’s a value-add or manufacturing process required on the front end by a manufacturer or
distributor to be able to fulfill an order or a contract. Bryan and I
felt there was a void in the market we can fill,” Stanton explains.
Ballowe points out there are companies focused on one
aspect of the purchase order and supply chain financing business, such as providing letters of credit for finished goods. At
TradeCap, they are looking to provide a menu of options for
borrowers, and they are also prepared to work with banks,
factors, ABLs and other lenders who need a way to fill in
financing gaps for clients.
“Clinton and I have a really good handle on understanding
what it takes to provide funding for production transactions a
lot of folks tend to stay away from,” Ballowe says.
“We feel there’s an untapped market on a smaller scale as
well. There are a lot of companies that present good growth
opportunities. Management has shown sales history, whether
it’s with their existing company or in the past. If we like the
product and we like the story, we can be very flexible and
provide financing as low as $50,000. There’s a large untapped
market for smaller companies seeking the offerings we provide.
Being able to provide not only finished goods letter of credit
financing, but also the very detail oriented production financing
in the size, scope and the range of what we provide differentiates us.”
Both Stanton and Ballowe are familiar with the technology
that has transformed the 21st century. Stanton notes that while
many lenders are comfortable with finished goods finance,
TradeCap can help distributors selling hardware and software
to companies as well.
“We provide what we call reseller financing, which really is
more geared specifically to the technology hardware/software
space,” Stanton explains. “Many times, software costs can’t
be financed, but we’re able to understand those specific types
of contracts and provide money for not only the hardware but
also the software being purchased from the original equipment
manufacturers (OEM) or authorized distributors selling to
customers through a value-added distributor. There’s very few
companies out there with the level of expertise or the willingness to finance those types of transactions.”
“Amazon is an amazing conduit for suppliers. Finance companies continue to provide the best service possible to keep
inventory levels at the peaks where you know demand is being
met. So that offers a lot of potential for companies like ours to be
able to provide a solution for those businesses selling online.”
— Bryan Ballowe, Managing Partner, TradeCap Partners