US/China Textile Talks Fail for Sixth Time
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The sixth round of negotiations on regulating Chinese textile imports into the U.S. ended October 12. The two trade delegations once again failed to reach an agreement. Following the fourth round, the Bush administration re-imposed quotas on two textile categories. Some U.S. companies using China as a main source for their products are searching for other alternatives due to the instability and unpredictability of the situation. South and Central America and other parts of Asia are a few of the areas being considered for textile supplies. |
New Orleans and Houston Ports Recovery
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New Orleans Port president and chief executive, Gary LaGrange, expects the port to be at 30-35% of normal operations by mid-October and 100% in 5 months. Given that the port is the fifth largest in terms of short tons of cargo handled, U.S. officials quickly opened other trade routes to replace the link with New Orleans. New Orleans is recorded as the second largest American port for coffee and a top destination for raw sugar. It was the top destination for imports of cement and other building materials into the U.S. in 2004. The Port of Houston was open for cargo traffic less than a week after Hurricane Rita went through the area. For more information about financing for hurricane rebuilding efforts, click here. |
Retailers Optimistic About Holiday Sales
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The National Retail Federation predicts a 5% growth rate for this year's holiday retail sales. For the November-December shopping season, 2004 sales were $414.7 billion, with $435.5 billion expected for 2005. However, higher distribution costs may affect the outcome, and retailers may respond by holding holiday sales earlier. Researchers agree sales of luxury goods should continue to be strong. |
New Deal Highlights
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$7.5 Million Inventory Purchase Commitment
Los Angeles based Footwear Distributor
Background:
A footwear importer with a license from a well-regarded urban apparel brand was refinancing its business to support growing
sales opportunities to a diverse customer base. The company evaluated several options, including an equity partner. However, since the brand had been established, management determined additional equity was not needed for the ramp-up of inventory purchases that were required to support the sales growth.
The company had established good working relationships with overseas suppliers. While letters of credit were not required, the buildup of inventory on the water placed a strain on the
company's suppliers. The company sought to alleviate this by
finding a financial source that could finance inventory in-transit.
Funding Solution:
Transcap provided an inventory financing credit facility by making payments against incoming documents from overseas suppliers. When the inventory arrived, the goods were shipped to the company's customers, invoiced, and then factored with a
finance company that had established an inter-creditor
agreement with Transcap. Transcap was repaid via the
collection of the factored accounts receivable. The company
was able to fulfill the increased sales opportunities and maintain
a solid working relationship with its overseas suppliers.
$3 Million Inventory Purchase Commitment
Los Angeles based Hardware Importer
Background:
A team of individuals that represented a foreign owned supplier
of hardware and home improvement products desired to start
their own importing operation. With a modest level of start-up capital, the company was formed and capitalized on its
strengths in sourcing and selling. A substantial series of orders
were obtained from a large "club" retail chain. While letters of
credit were not needed, the company needed to pay its vendors
for goods upon shipment from overseas.
Funding Solution:
Transcap was referred into the situation by a bank that could
not provide the financing of inventory in transit. A program was created where 100% of the cost of the goods was financed by funding cash against documents presented ("D/P") by the
overseas suppliers. The goods were drop-shipped to the retail
chain, and Transcap was repaid via the collection of the
accounts receivable. The company is now poised to increase
sales with other products as well as expanding its customer base. |
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TRANSCAP
The Premier Provider
of Purchase Order and
Trade Finance Solutions
Transcap, A Wells Fargo Company
900 Skokie Blvd
Northbrook, IL 60062
847-753-9600
www.transcaptrade.com
Transcap Opens West Region Office
Mark D. Orlando appointed West Region Managing Director.
Transcap West Region Office
Warner Center Towers
21550 Oxnard Street.
3rd floor
Woodland Hills, CA 91367
818.224.6638
Click here to find out more
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If you're facing customer requests for financing inventory in-transit, call Transcap. We have the experience to structure, monitor and fund transactions while increasing the amount of accounts receivable available for financing by banks, factors and finance companies. As the lender, you can continue to support your customer without expanding your risk. |
