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Case: Two Chinese leading companies need trade finance solution that is easy to manage and compliance to both of their policies.

November 9, 2016

Situation

Headquartered in Herndon, Virginia, China U Company Americas is the largest international subsidiary of Chinese telecom giants, as well as the only authorized re-seller of domestic Chinese telecommunication products to North American companies.  China U Company Americas has offices in 31 countries, providing access to Chinese U Company network assets for customers in the United States, Canada and Latin America.

 

L Company, the Chinese leading electronic device company, has operations in more than 60 countries and sells its products in around 160 countries. They started a smart phone bundle sales program with China U Company, in which the China U Company will first purchase 2000 smart phones from L Company and then sign contracts with its clients. The contract lasts for two years and the customers will have the smart phone for free but with a 200 RMB monthly fee for the contract service.

 

However, the conflict between the financial policies of L Company and China U Company created a barrier for closing the deal. The financial policy of L Company requires that the payment for 2000 smart phones must be received at once within 6 month while the China U Company could not pay for the smart phones at once until bundle service contract has been signed with single customer.

 

Solution and Result

Our solution is to act as an intermediate financial service provider between this two parties who receives progressive payment from China U Company and fulfills the lump-sum cash flow requirement of L Company. In that way, L Company secured its cash flow and turned over its inventory with only little financial cost.

 

 

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