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GE Capital’s Commercial Distribution Finance (CDF) business announced today an increase in the floorplan and working capital credit facility for Claremont, N.H.-based Red River, a company that specializes in providing information technology (IT) hardware integration, maintenance and support services to the U.S. government.
Red River’s credit facility with CDF has grown steadily from $500,000 five years ago to $80 million today, allowing Red River to grow and meet increased customer demand during peak federal, state and local government and educational buying seasons.
“Red River has seen remarkable growth, aided by government contracts and purchasing vehicles that can account for millions of dollars in technology procurement, hardware integration and services revenue for us and our technology partners,” said Rick Bolduc, Red River’s CEO. “Our rapid expansion means we need a lending source that can keep up with us and understands the intricacies of our business and capital requirements. CDF is very experienced in the IT channel and they understand the working capital requirements of our business.”
“We’re pleased to be able to deliver the credit capacity that solutions providers like Red River need to thrive,” said Mike Marcolina, managing director of CDF’s technology finance unit. “We continue to collaborate with technology vendors to provide flexible product and working capital financing solutions to the channel.”
Inventory working capital financing is an important element of a successful channel partner business model. By providing dependable financing to channel partners, IT integrators effectively increase their own pool of working capital. They also receive a predictable payment stream from a reliable, high-quality financial institution.
Providing an alternative to standard open account terms which typically require payment in full within 30 days, inventory working capital financing programs allow integrators to manage the cash conversion cycle from inventory procurement to accounts receivable collection. Integrators that use inventory working capital financing can also reduce bank borrowing costs and often benefit from a more efficient billing and collections process.