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Asset-Based Lending [USE CASE]

Growing and managing seasonal demands
with the flexibility of ABL

2 business people reviewing numbers on a tablet.

CLIENT OVERVIEW

A Utah-based fragrance brand specializing in all-natural ingredients and artisan craftsmanship experienced rapid growth due to increasing consumer demand for clean beauty and sustainable products.

Known for its unique scent profiles and commitment to quality, the brand has cultivated a strong following across boutique retail and direct-to-consumer channels.

Production had reached full capacity and the company was profitable, but output couldn’t keep up with demand as seasonal fluctuations prematurely depleted stock. With sights set on accelerated production and wider distribution, the company was poised for its next major growth phase. 

THE CHALLENGE

While the brand’s year-over-year revenues were exceeding expectations, its operations were beginning to feel the strain of surging demand. The business had outgrown its existing credit line with a prominent bank and was unable to access the additional working capital needed to scale. 

Key issues:

  • Seasonal demand spikes that required increased inventory readiness.
  • Capacity limitations in production and warehousing.
  • Restricted liquidity despite strong long-term asset value.
  • Urgency to act ahead of key retail seasons to maintain momentum.

THE SOLUTION

The company turned to eCapital for a financing solution designed to support its operational growth and financial flexibility. After conducting a thorough review of the business’s financials and asset portfolio, the eCapital team worked closely with the client to:

  • Understand their full cash conversion cycle (ccc).
  • Assess the value of accounts receivable, inventory, production equipment, real estate, and intellectual property (including brand equity).

Based on this holistic assessment, eCapital structured a $20 million lender buyout and facility upsize. Combining the unique benefits of accounts receivable finance to accelerate cash flow, with supply chain finance to expand and streamline distribution networks, the fragrance brand implemented strategies to increase output and distribution.

THE RESULTS

With this financing in place, the fragrance brand is now empowered to:

  • Increase production lines to meet demand surges more efficiently.
  • Upgrade equipment to enhance speed, consistency, and quality.
  • Expand inventory storage for better seasonality planning.
  • Streamline transactions to enhance supply chain partnerships.
  • Pursue new retail partnerships and broaden its national footprint.

By leveraging the benefits of more than one business financing solution, the perfumery was able to attain credit limits well beyond its previous facility. This approach ensures the fragrance brand can scale confidently while maintaining quality and profitability as it continues to increase its position as a leader in natural, artisan fragrance.

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