Tradewind has closed a reverse factoring deal with a Hong Kong-based electronics company whose buyer is located in the U.S.
The deal marks the addition of a second supplier to the vendor finance program that Tradewind has set up for the U.S. buyer. The electronics company specializes in smart watches, smart bracelets, and other smart accessories, as well as digital devices like tablets. They sell to global traders located in Japan, South Korea, North America, South America, Europe and Southeast Asia.
The electronics company was accustomed to receiving sight payment from its customers, but it wanted to make an increased effort to keep winning the business of their new U.S. buyer, so it decided to offer open account payment terms to the buyer. Concerned that a 60-day open account arrangement would jeopardize its working capital and ability to pay its domestic suppliers, the company welcomed the buyer’s proposal for supply chain financing. The buyer enlisted Tradewind’s after working with Tradewind to onboard of the first supplier to the program.
The early funding from Tradewind’s facility, with cash advances structured in U.S. dollars, equipped the electronics company with the liquidity to pay its suppliers and stay competitive. The company could also rest assured knowing that Tradewind provided credit protection in the case of default due to buyer’s insolvency.
As a result of Tradewind’s reverse factoring, the exporter had sufficient cash to fill requests for orders, and the buyer was able to stock up on the merchandise it needed for the season, before Thanksgiving.
“We are happy to provide services that are beneficial to both the seller and the buyer. With our funding, our client received the footing to grow their business. Furthermore, our team ensured a quick turnaround time that allowed the importer to equip for their seasonal sales under a tight schedule. The Tradewind team is appreciative for the trust the buyer had in us in making the decision,” said Alice Lo, VP of Sales for Tradewind Hong Kong.
