Shield:Capital Funding For Chinese Enterprise

Large scale funding for Chinese Companies
Shield International has created a financial and legal structure which can raise significant capital for Chinese companies to fund their growth both domestically and internationally.

Chinese private (non-state owned) companies have unique challenges both for domestic and international trade. Many Chinese banks are not able to fully service the needs of these growing companies.

Our financial solutions will assist Chinese companies to
		Fund future growth to expand infrastructure, acquire new technology and capture new markets.
		Offer extended payment terms to retain existing, and obtain new buyers
		Pay for raw materials and operating expenses.

Shield International’s unique funding structure, offers Chinese enterprise a hard-to-find solution in funding their growth and trade cycle. We are able to provide loans to suitably qualified Chinese Companies for between US$ 5 – US$ 100 million. The revolving term loans can be for a term of three years or longer. Our funding comes from Investment and Hedge Funds based in the USA and the UK, that have approved and embraced our structure.

Our target market is Chinese private (non state-owned) companies, doing business both domestically and internationally.

Our Capital funding can be used as an alternative to having to raise money by, selling off a significant portion of shareholding, through an IPO, or by issuing corporate bonds. We believe that our structure offers many Chinese companies the best opportunity to fund their growth, and sharpen their competitiveness in the market.

Our structure is based on the factoring of accounts receivables. The receivables are insured against default risk by a major international credit insurer. These insured receivables are then used to support a revolving multi-year term loan.

Pricing on deals is linked to the LIBOR rate (London Inter-Bank Offered Rate). Each deal is assessed independently and may include different terms. If a borrower has accounts receivables from high profile and good credit rated Chinese or multi-national companies, then our terms could be even more favorable.

Companies who make use of our funding structure can take advantage of the US Dollar - Chinese Yuan currency exchange rate. Almost all analysts agree that the Yuan is an undervalued currency, and will appreciate in the long term against the US Dollar, and other international currencies. Chinese companies can take advantage of the long term strength of their local currency; by obtaining capital funding, and repaying it in US dollars (or other international currency).This can result in very significant savings on the amount to be repaid on the loan.

Chinese companies are realizing that extended payment terms are important to Buyers. If a buyer has a choice of where to place an order and one company wants a Letter of Credit up front and another company can provide a 90 or 120 day payment term, the company that offers the extended payment terms will attract more buyers. Shield International can finance the trade cycle so that the Chinese companies can provide better terms to their buyers, thus increasing the orders.

Buyers are prepared to pay more for their goods if they are offered extended payment terms. Chinese companies can raise their prices by more than the cost of their financing from Shield. This increases the sales, and also the profit of the Chinese companies.

For further information please contact: info@shield-intl.com

Case study:

Capital Funding to Chinese Companies Increases International Sales.
In 1997, one of the major household goods and building supply chain stores in the USA (a high credit rated company) purchased approximately 10% if their inventory from Chinese manufacturers. By 2007, over 50 % of their inventory was being purchased from Chinese manufacturers.

Most Chinese companies insisted on payment by means of a letter of credit to be paid on delivery. The problem encountered by this major USA retailer was that the billions of dollars set aside for letters of credit was adversely affecting their liquidity and credit rating. They wanted their Chinese suppliers to extend a 60 -120 day trade cycle –extended payment terms.

The company was eager to offer their Chinese manufacturers a higher purchase price for their goods in return for the relaxing of the letter of credit requirement. Many of the Chinese companies did not have the liquidity to forgo this requirement or to offer payment terms of 60 -120 days. These Chinese companies were replaced by others who are able to do so.

With Shields International, Chinese manufactures are able to retain and attract more foreign buyers by offering extended payment terms. The safety of payment is assured by obtaining credit protection insurance, which is a built in feature of our funding structure.

In the world of business it is not often that one finds such a win-win situation for both the seller and buyer. Shield’s funding offers Chinese enterprise a unique opportunity to fund their growth and to offer excellent trading terms to attract foreign buyers.