Tradewind has announced the closing of a $1 million post shipment finance facility for an international trading company based in China that specializes in the import and export of auto parts.
Through its arrangement with Tradewind, the company received the liquidity it needed to support both open account terms requested by its overseas buyers and payment before delivery sought out by its suppliers. The company sells mostly to customers in Europe and the US and, with Tradewind’s assistance, was able to take on larger orders and compete for bigger buyers.
The client approached Tradewind to replenish its cash flow after it had purchased goods from Chinese suppliers but was still waiting on payment from buyers abroad. As automated production lines replace manual labor in the auto parts industry, factories are pressured to meet these new operating expenses and therefore demand a short turnaround in payment from their customers. On the other hand, with more options available in the market, foreign buyers expect not only higher quality products and better prices but also longer payment terms. Consequently, the overlap in payment cycles caused a liquidity crunch that stagnated the client’s growth because, as a trader, it relies heavily on cash.
With office locations in China, Tradewind provided liquidity readily to the client and removed the financial burden placed on its shareholders, whose capital the company solely depended on for investment purposes. Tradewind’s financing package also includes credit protection, which enabled the client to feel more secure in case of buyer insolvency.
“We are pleased to onboard companies like this whose prominence in the international marketplace requires flexible payment terms for both its buyers and suppliers. We are happy to see that Tradewind’s cash flow solutions provided the necessary liquidity for the client to stay competitive in the global auto parts industry,” says Alex Li, Country Manager of Tradewind China.
Tradewind provides innovative international cash flow solutions tailored for global clients. Focused on the mid-market, its core products are non-recourse factoring and supply chain finance. The group has built an unrivaled reputation for the depth of its international finance expertise by maintaining a network of offices around the world including the USA, China, India, Hong Kong, UAE, Turkey, Bangladesh, Pakistan, Iceland, Bulgaria, Hungary, Peru and its headquarters in Germany. Combining financing, credit protection, and collections into a single trade finance facility, Tradewind offers streamlined, flexible and best-in-class services.
Compliments of Tradewind, a member of the EACCNY