Estimated reading time: 3 minutes
Background
Credit facilities:
Accounts Receivable Financing Facility
United Capital Funding
Purchase Order
Financing Facility
TradeCap Partners
Industry:
Aerospace, defense logistics parts and supply chain services
Customer Type:
U.S. government agency
General Description:
Parts, packaging, labeling, and end-to-end logistics services
Business Challenge
As awarded contract volume increased, this aerospace and defense logistics company experienced growing working capital pressure driven by two distinct forces common within the government contracting space.
First, extended payment cycles of government receivables created a cash flow gap between invoice issuance and payment receipt. While customer credit quality was strong, delayed remittance limited liquidity and constrained growth potential. Second, fulfilling awarded delivery orders required upfront capital to fund supplier costs and operational expenses before goods could be delivered and invoiced. Traditional financing options lacked the flexibility to support both pre-invoice financing needs and post-invoice receivables monetization.
To maintain momentum and position itself for continued expansion, the company required a coordinated capital solution capable of supporting the full contract cash conversion cycle.
Proposed Solutions
United Capital Funding (UCF) provided an accounts receivable financing facility secured by government receivables, enabling the company to convert invoices into immediate working capital. The structure delivered strong advance rates and ongoing liquidity without restrictive covenants or reliance on traditional balance-sheet lending.
TradeCap Partners structured a purchase order financing facility designed to fund supplier payments for parts and related fulfillment costs associated with confirmed customer orders. TradeCap’s transaction-based approach bridged the gap between supplier payment obligations and delivery and invoicing.
As fellow subsidiaries of Gulf Coast Bank & Trust, UCF and TradeCap collaborated to deliver a financing solution that aligned with the company’s operational workflow and growth strategy. Together, the integrated facilities allowed the aerospace contractor to:
- Access working capital based on receivables quality rather than overall balance sheet constraints.
- Fund supplier and operational costs tied to awarded purchase orders prior to invoicing.
- Execute on larger government and aerospace contracts with greater speed and confidence.
- Avoid equity dilution and unnecessary financial covenants.
- Establish a scalable capital structure suitable for long-term growth within aerospace-focused markets
Conclusion
The company successfully closed an accounts receivable financing facility with United Capital Funding alongside a purchase order financing facility provided by TradeCap Partners. This integrated working capital solution addressed both pre and post-invoice financing needs, allowing the borrower to support contract execution while maintaining liquidity throughout the contract lifecycle.
By combining receivables financing with purchase order funding, the company is now well positioned to pursue larger aerospace and defense opportunities, strengthen supplier relationships, and expand its presence within strategically important aerospace corridors. The structure serves as a strong example of how coordinated specialty finance solutions can support growth‑oriented aerospace contractors operating in government and defense markets.
Connect with United Capital Funding