STAR will consider funding Work-In-Process, if the client is pre-sold to a credit approved customer, and STAR can get comfortable with the manufacturing process. The client is not buying a finished product. He is instead buying various components, and either sending them to a manufacturer for assembly, or assembling the product himself. In either case STAR can buy the components and have them shipped to the manufacturer.
Whether the client or an unrelated company is the manufacturer, STAR will evaluate the ability of the manufacturer to produce a product in the right quantities, quality and in the right time-frame. This is a hands-on and extremely risky business, since STAR chances losing 100% of its investment if the product is never completed, or not completed in the right time frame, or is not of the right quality.
STAR uses the same financial and logistical skills for Work-In-Process financing as it does for purchase order funding finished goods. However, it is the manufacturing background of STAR’S principals that gives it the confidence to evaluate the production cycle and the ability of the manufacturer to produce the right product in a timely fashion.