Financing an International Aerospace Company

Mar 2

08:16

2012

Lanette Tucker

A 30 year old international specialty coating company for the aerospace industry, located in Croatian, headquartered in Germany, is the largest compan...

A 30 year old international specialty coating company for the aerospace industry, located in Croatian, headquartered in Germany, is the largest company in the world engaged in preparing and painting molded interior parts for commercial and business aircraft. They were offered an opportunity to sell to a Tier One supplier in the United States, with the caveat that they open a plant in California right next door to the supplier to minimize packaging and transportation costs.

Immediately, they incorporated in the United States and began working with an international business consultant to help them through the process of building the plant. But because the U.S. subsidiary was newly-incorporated, traditional bank financing to build their new site was not available. Their consultant recommended a factoring company with experience working with foreign companies opening U.S.-based operations.

Because the U.S. subsidiary was foreign-owned and had no U.S. assets, the factor needed a cross-corporate guarantee with the parent company which was larger and more credit-worthy. The factoring company put their diplomacy and negotiating skills to work and were able to seal the three-party deal after conducting due diligence on the international ownership. This level of expert interaction and ability is only found in the most experienced and accomplished factoring companies.

The factor helped the fledgling U.S. Company jump through many hoops along the way. Working through several layers of legalese with lawyers on both sides of the Atlantic, they ironed out the legal issues and flew out to the building site in California to get the contract signed. Always look for a factor that is willing to do what it takes to create a successful transaction.

The accounts receivable financing solution gave them immediate access to the cash flow they needed to support their U.S. growth, assistance managing their accounts receivable, and serve as their domestic credit department. The process of accounts receivable financing is quite simple and is a speedy and efficient way for a company to get cash when they need it without going the traditional route of getting a bank loan.

By the time the new plant was completed, the U.S. entity had the financial resources they needed to hit the ground running. The factors solution had helped the Company take advantage of the opportunity of a lifetime. The factoring company’s experience helped ensure a smooth process and was integral in mitigating the Companies success.

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