A new boutique US trade finance outfit is being created to specifically focus on financing US imports of Chinese goods.

CBC Trade Finance, a division of US factoring firm Capital Business Credit (CBC), will provide up to 120 days of open account terms to US importers and pay Asia-based manufacturers 100% of their receivables without recourse on shipment of goods.

The firm, headquartered in New York but with offices in Hong Kong and Shanghai, will be headed up by Andrew Tananbaum, CBC chief executive officer, and regionally by Patrick Ho, CBC’s vice-president and regional manager, Asia.

GTR speaks with Tananbaum about the niche that the new division hopes to fill: “We have deals in place and are providing incremental unsecured debt to US importers. We believe that the opportunity is to work with a much broader collection of Asian suppliers and the non-investment grade US importers of banks and other financial institutions. We can also provide asset based lending and factoring through CBC and thereby provide a full post shipment solution to the non-investment grade importer.”

“We believe that the opportunity is to work with a much broader collection of Asian suppliers.”

“CBC Trade Finance allows for a more efficient and profitable exchange of goods. In short, suppliers will get paid faster and importers will be able to pay for their goods later in the process,” adds Tananbaum.

Ho notes: “In some cases, importers will receive their goods and provide them to their retail customers even before payment is due to the manufacturer, which is truly unique in the industry, allowing shelves to be stocked in an expedited fashion, enabling consumers to buy goods quicker. Effectively, we are providing the capital lubrication to the international trade finance process.”

In 2009, the US imported nearly US$300bn worth of goods from China, accounting for 19% of overall US imports for the year.

The US trade deficit with China fell by 15.4% in 2009 to US$227bn, primarily because Chinese imports were down 12% to US$296bn.