Tradewind closed a $1 million post shipment finance facility for an international auto parts trading company based in China. The company sells mostly to customers in Europe and the U.S.
The client needed to replenish its cash flow after it had purchased goods from Chinese suppliers but was still waiting on payment from buyers abroad. Automation in the industry has increased pressure on factories to meet new operating expenses and therefore demand a short turnaround in payment from their customers, while 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.
Tradewind provided the client with the liquidity it needed to support both open account terms requested by its overseas buyers and payment before delivery sought out by its suppliers, removing the financial burden placed on its shareholders, whose capital the company solely depended on for investment purposes. The financing package also included credit protection, which provided security to the client 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,” said Alex Li, country manager of Tradewind China.
Tradewind provides non-recourse factoring and supply chain finance to global clients and has offices in 11 countries throughout Europe, Asia and North and South America.
