Financing US Subsidiaries
Foreign business entities looking to enter the U.S. market often create a domestic subsidiary to manage operations and hold title to U.S. assets. Prestige provides creative global solutions for domestic subsidiaries allowing them to grow and improve liquidity resulting from the sale of accounts receivables.
West Coast Camera Company
Client: West Coast Camera Company
Situation: US Subsidiary seeking financing as foreign parent was no longer willing nor able to support the subsidiary.
Need: Working capital for growth.
Solution: Prestige Capital was able to provide the capital and allow the subsidiary to finance their growth.
New York Watch Company
Consumer ProductsNew York
Client: New York Watch Company
Situation: Company was seeking immediate cash flow during their busy fourth quarter.
Need: Since their bank was unable to provide a loan, an introduction to Prestige was made to provide invoice financing.
Solution: Within one week the client financed $1,000,000 of receivables enabling them to pay their suppliers in a timely manner.
Hi-Tech Electronic Manufacturer
Client: Hi-Tech Electronic Manufacturer
Situation: Foreign-owned company had US presence, but no operational or support staff in the US.
Need: Client sought acquisition financing to assist in the purchase of this entity and incorporate in the US.
Solution: The combination of factoring the target’s A/R and the unencumbered A/R of one of their other holdings provided the necessary funds to complete the acquisition within two weeks of being introduced to the deal.
Client: Midwestern U.S. manufacturer with over $1 billion in annual sales.
Situation: The subsidiary’s parent company embarked on a major capital expenditure program, resulting in restrictions on intercompany advances.
Need: Although strong financially, the client needed working capital flexibility without creating debt.
Solution: Prestige purchased their receivables without recourse through a $30 million factoring line, so the client could access immediate cash. Since factoring is not considered a loan, the company assumed no debt on its balance sheet.
Client: U.S. Subsidiary of German carton manufacturer with $5 million in annual sales.
Situation: The ten-year-old subsidiary was historically funded by its foreign parent company. Due to the global banking environment, the parent company made an abrupt decision to stop supporting the U.S. subsidiary. As a result, the subsidiary faced closure if it could not secure financing.
Need: The subsidiary needed immediate stand-alone financing to provide for its ongoing capital needs.
Solution: Within four days, Prestige purchased and funded $300,000 in receivables which prevented a disruption in operations and preserved jobs. Without this funding, the subsidiary probably would have closed.