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Short-term Working Capital Loan
Purpose:
Working capital, including:
Raw material purchase
Pay off various expenses
Characteristics:
3 months, 6 months, or 12 months, at client"s option
Extendable subject to annual review based on client"s own performance (pay interest only)
Merits:
No complicated formality involved (repaying & re-borrowing)
Stable funding resource (extension subject to client"s own performance instead of other external factors)
Avoid possible disorder in cash flow caused by repaying & re-borrowing (impacting normal biz operation)
Avoid possible break in cash flow caused by cease of promised credit after repayment (severely impacting normal biz operation)
Medium-term Capex. Loan
Purpose:
Fix-assets investment, including:
New equipment p purchase,
Equipment upgrade & technology innovation
Build up new workshop & new plant etc.
Characteristics:
Usually 2-3 years
Semi-annual or quarterly repayment
Equal or unequal installment
Max. 1 year grace period subject to cash flow
Term loan balance convertible to working capital loan after 50% principal repayment at least
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