https://www.youtube.com/watch?v=mT43r41dMB0
Powering a manufacturing production surge
with a flexible ABL facility
CLIENT OVERVIEW
A rapidly growing private label manufacturer and distributor of candles and accessories recently secured a landmark deal: an exclusive supplier contract with a major US big box store chain. Under this agreement, the manufacturer would become the sole provider of candles and related accessories nationwide—an achievement that validated years of steady growth, operational excellence, and product quality.
With demand set to skyrocket, the company needed to quickly scale production capacity and shore up working capital to meet the aggressive delivery schedules and volume expectations of its new retail partner.
THE CHALLENGE
Winning the exclusive contract was a major achievement, but it brought immediate operational demands. The box store chain required a 34% increase in production, pushing the manufacturer to invest quickly in retooling, equipment upgrades, bulk raw material purchases, new staff, and expanded logistics. However, the company’s cash flow model wasn’t designed for such rapid scaling, especially with the retailer’s strict payment terms—allowing invoicing only after delivery and enforcing net 60-day cycles.
To capitalize on the opportunity without straining operations, the manufacturer needed fast, flexible funding to bridge the cash flow gap.
THE SOLUTION
The manufacturer turned to eCapital for a solution tailored to its unique growth scenario. The eCapital team responded quickly, conducting a comprehensive review that included:
- A deep dive into the company’s financial statements.
- A site visit and tour of the production facility.
- An analysis of the company’s historical sales growth and receivables strength.
Leveraging the robust accounts receivable associated with the exclusive contract, eCapital structured a $45 million asset-based line of credit (ABL) to support the company’s accelerated growth strategy.
A critical component of the solution was an unbilled facility, which allowed eCapital to:
- Advance funds based on purchase orders, even before formal invoices are issued.
- Provide ongoing working capital throughout the manufacturing and delivery cycle.
- Mitigate the strain of the box store’s 60-day payment terms, ensuring smooth cash flow and uninterrupted operations.
THE RESULTS
With the new financing in place, the manufacturer was able to:
- Rapidly expand production to meet the 34% volume increase.
- Retool and upgrade equipment for long-term efficiency gains.
- Purchase raw materials in bulk, reducing costs and delays.
- Hire and onboard additional staff to meet order timelines.
- Maintain strong financial health while supporting a major national retailer.
The unbilled facility proved essential, giving the company confidence and cash flow flexibility to meet its contractual obligations without delay or disruption.
By partnering with eCapital, the candle manufacturer didn’t just meet expectations—it set itself up to thrive as a preferred partner to one of the nation’s largest retail chains.
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