Case: An apparel manufacturer needed a trade finance solution that could develop with their company.
Situation ABC Inc., a small apparel manufacturer located in Jiangxi province in China, was rapidly expanding and needed financial leverage to upscale their operation. The company was highly depending on receivable factoring and debts from individuals that resulted to a huge burden of financial cost. Given the company was in its early stage, the company had difficulties that a relative weak credit bargaining position with their various stakeholders is deteriorating their cash flow in operation cycle. Furthermore, ABC Inc. could hardly be granted a bank loan because its credit profile is not solid enough. In this specific deal, our client was undergoing a large volume apparel trade with a wholesaler in California. With the doubt of counterpart credibility and hesitation to pay a huge financial cost bill, ABC Inc. urged a new tool to protect its trading position and needed appropriate financial tool to leverage its operation. Solution “We were not familiar about the wholesaler in California and there were too many unpredictable factors. Certain payment method was required to protect our liquidity and to make sure we get the payment,” said the department head of the Trading and Public Relation Group of the ABC Inc.. “We don’t have stable cash flow due to the special seasonality of this industry. Especially for this large deal, we need extra cash in advance to kick off our production.” ABC Inc. contacted Alibaba to assist them in finding the right trade finance solution provider to fit their business needs. After reviewing the fundamental operationof ABC Inc. and the recognizing the urgent requirement of of ABC Inc., Alibaba recommended its long-term business partner in U.S., AURA LIMITED. AURA LIMITED was able to provide of ABC Inc. with the financial leverage they needed to expand their operation, along with the security and reliability of the payments to protect their liquidity. Result Benefited from the solution provided by AURA LIMITED, of ABC Inc. fulfilled that deal and had achieved significant financial cost saving in a leveraged operation. “The financial cost for small or middle size entrepreneurs could be exorbitant, but not with AURA LIMITED,” said the CEO of of ABC Inc.. “it is a relief knowing that I don’t need to earn an incredibly high return to keep my company break-even. ” Now, of ABC Inc. is growing rapidly with appropriate financial leverage and achieving their goal of growth.