Factoring-New solution for trade finance

Report
Alternative Financing Strategies
for Small to Mid Size Businesses
Presented by
Neisha Pereira
VP Operations of 1st PMF Bancorp (U.S. Parent)
Contact: [email protected] / (310) 858-6696 x206
Summary
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Background & Services of 1st PMF Bancorp
Background on Baoli Investments (PMF’s China subsidiary)
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Alternative Funding Strategies:

Trade Finance

Minority Loans

And Guarantees
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CASE STUDY

Foreign Trade Financing
1st PMF Bancorp
 Founded in 1985
 Commercial Bank Lender for SME
(Small Medium Size Enterprises)
 United States Ex-Im Bank Lender
 Certified Minority Lender (minority
certification is required by National
Minority Development Council
(www.nmsdcus.org )
st
1
PMF Bancorp Services
PMF LENDING & BUSINESS SERVICES:
A. Providing Working Capital Solutions to Medium Sized
Businesses as Direct Lender:
-Trade Financing
-Minority Loans for businesses
-Receivable & Purchase Order Financing
B. Credit and Receivable Management Services:
- Credit
Evaluations on U.S and Chinese Firms
- Complete On-Line Accounting for all Clients
- Collection and Legal Support in US and China, if needed
- Invoice Guarantee against Customer Non-payment (China & U.S.)
C. New Customer Introduction through the Minority
Program (i.e. Home Depot, Honeywell, etc…)
Baoli Investment’s Services
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Baoli was setup in China in 2004 (as PMF’s WOFE)
Provides support/consulting services to U.S. Companies
-Sourcing Suppliers (i.e. locate, qualify, negotiate price,
inspect goods, finance via PMF, etc…
Provides Supplier Due Diligence Services/ Credit
Reports on Chinese Companies
Provides Legal and Staff Support for China market
Websites:
www.pmfbancorp.com.cn
www.pmfbancorp.com
What is Trade Financing?
 The financing of goods/product from
one country to another usually
performed by intermediary bank/trading
company.
Trade Finance Strategy
(1) Issues PO
Chinese
Supplier
(4) Goods
(2) Issues PO for
Imported Product
Importer
(4) Goods/Invoice
U.S. Customer
(3) WITHOUT PMF: Importer makes
CASH PAYMENT in advance
(no trade financing & hurts cash flow)
PMF
(3) WITH PMF: PMF MAKES PAYMENT/GUARANTEE
(with PMF approved PO Trade Financing)
(5) Payment to
PMF Bancorp lock box
Results of PMF’s Trade Financing
OUR CUSTOMERS ARE ABLE TO:
 Purchase/ Finance more imported goods
without impacting domestic working capital
 Professionally manage foreign purchase of
goods via our Chinese Structure:
---i.e. Inspections of goods,
Support Staff, Legal, etc….
 Implement Risk Management tools (i.e. L/C,
D/A, Invoice/Guarantee with Open terms, etc.)
Minority Loan Program
-Unique PMF Program
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Certified Minority Lender via National Minority Business Dev. Council
Requires certification via the Southern California Minority Business
Development Council (http://www.scmbdc.org/join/check.asp)
Requires SME to be working with one of the corporate members
Requires SME to justify use of funds
Loans amortized over 4 to 10 yrs
Loans up to $1 million
Requires Limited Financials strength
Requires proof Management capabilities for order
Requires Approval by Certified Lender (i.e. PMF Bancorp)
PMF’s typical Client:
-Not traditionally Bankable due to insufficient collateral
-Annual Sales between $500,000 to $20 million
-May have weak Cash flow
-May have weak 2nd Collateral Source
-May have Negative Profits/Equity (trends must be
positive)
-Must have positive Sales Outlook
-Must have Quality Purchase Orders and/or
Receivables to drive this transaction
-Must have Experienced Management with track
record
Case Study: Trade, A/R Finance and Minority Loan
SITUATION:
•PMF’s “MANUFACTURING MINORITY CLIENT”: first approach PMF
producing tools for big box stores and had annual sales of $2 million U.S.
(also no profits for the last 2 yrs due product shift, but….);
•Client’s International Sales were rapidly growing;
•Additionally, Client needed Loan to produce tooling for 5 products
• Supplier Terms and Customers demanding 60 to 90 day Terms
PMF’s SOLUTION:
•Provided Trade Financing and PO Financing to accelerate and
ease cash-flow so suppliers could be paid early for “supplier
discounts” and company could continue to grow sales
•To provide eligibility on financing International (A/R) Customers
•To provide Guarantees to Foreign Suppliers
•To provide Minority Loan for tooling in China
RESULTS:
•1 year later, PMF provided cashflow to grow CLIENT’s sales from $2
to $5 million without any losses.
Thank you…
and for questions contact:
 Neisha Pereira,
VP
 Freda Liang, General
OPERATIONS
 1st PMF Bancorp

[email protected]
 001(310) 858-6696
x206
Manager in China
 Baoli Investments

[email protected]
 0086(755)83734304

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