Blog/News

Express Provides a $3.5M E-Commerce Facility to a well established Manufacturer.

Express Trade Capital (“ETC”) is thrilled to announce the addition of a $3.5MM B2C – Ecommerce financing facility to a well-established and fast-growing cashmere apparel manufacturer.

The client produces sustainable cashmere apparel sourced from ethically farmed and well pampered Mongolian goats.  Not content to be just another sheep in the herd, the client signed with Express over 6 years ago and obtained a multi-tier facility that included factoring, PO financing and both documentary and standby letters of credit.  Equipped with the proper facilities, the client wisely spent their time and capital, growing over 10x since starting with ETC.

In addition to producing high end, sustainable and affordable cashmere products, the client also employed savvy marketing skills to create quirky comedic content which garnered millions of views and helped rocket their online sales to over $25MM in annual revenue.

As their B2C ecommerce business took off and exceeded their wholesale revenue, the client needed additional assistance to keep up with heavy, growing demand.  They needed more capital but didn’t want to get fleeced by promises of quick cash at exorbitant rates. Naturally, they approached ETC based on the trust earned from shepherding their current facilities.  Upon discussion, it became clear these cashmere merchants needed more than mere cash – they needed a program that could scale along with their sales. 

Given the client’s solid longstanding history with the client and ETC’s deep knowledge of the client’s products and operations, ETC was able to quickly structure an e-commerce financing program to help them shear their sheep of expanding revenue. 

This facility allows the client to meet and exceed their internal projections and includes an accordion feature to expand the facility further based upon reaching certain credit milestones.  

This is just another example of how ETC can quickly deploy a vast suite of services to help clients grow and prosper.  Is ETC the GOAT of finance? Maybe. Maybe not.  But in this case, they certainly stepped up and led their flock to the promised land of greener pastures and great growth, ensuring their client’s capital needs shall not want.

Since 1993, ETC has been advising its clients on the following:

  • How to structure transactions for maximum profitability.
  • How to most efficiently move your goods from pickup to delivery to your customer.
  • How to manage cash flow and mitigate risk throughout the various stages of production and delivery.
  • How to eliminate bad debts.

To schedule a discovery call and see how ETC can help your business, contact us here ➡️ https://lnkd.in/e84Ti6hg

How to keep your business alive during a recession?

In the United States, recessions are a natural part of the economic cycle. While they can be difficult for businesses to weather, they can also present opportunities for growth and innovation. Here are 5 tips for how your business can survive and even thrive during a recession.

  1. Inventory & Interest Expense Management.

The first crucial point is to properly monitor your inventory levels. Too high of an inventory level will then require you closing out inventories at either cost or substantial potential losses which will have a negative impact on your gross margin. You will want to monitor and maintain the proper inventory levels going forward so that you are able to maintain your existing gross margin percentages.

Almost all business owners are dealing with higher interest rates as the federal reserve has been continuously increasing the prime rate to combat inflation. Companies need to be very cognizant of their borrowing needs and only draw down the minimum funds required to operate the business on a daily basis.  

To better plan for the management of the business, it’s recommended that companies do both: a full year cashflow forecast along with a rolling 3-month cash flow projection. While it is customary to do a 12-month projection, it is more appropriate to do a rolling 3-month projection to keep a good handle on constant changes in the economy as it relates to retail performance, interest rates, international politics etc.

Accordingly, if your business is seasonal in nature, it’s essential to monitor your inventory levels to make sure that if any potential adverse developments occur (that cause orders to be held back), your inventory levels are at a sustainable level.

2. Focus on Core Products. 

During a recession, consumers and businesses alike are likely to cut back on spending. This means that it’s more important than ever to focus on your core products and services. Identify the products and services that are most essential to your customers and concentrate on improving and marketing those offerings.

3. Expense Management as it relates to Overall Operations.  

Right sizing the business as it relates to expense management is imperative. If your sales volume is stagnating or decreasing, it’s vital that you look to right size the expenses, starting with payroll, which represents the biggest aspect of the expenses on the P&L side. However, a detailed review of all other operating expenses may uncover extraneous expenses which can be cut down or eliminated.

4. Embrace Digital Transformation.

In recent years, digital transformation has become increasingly important for businesses. During a recession, it’s even more crucial to embrace digital tools and platforms. This can help you reach new customers, improve your customer service, and streamline your operations.

According to a recent study by McKinsey & Company, companies that embraced digital transformation during the pandemic are more likely to see revenue growth and improved profitability in the coming years. This highlights the importance of investing in digital tools and platforms during tough economic times.

5. Maintain a Positive Attitude.

Finally, it’s important to maintain a positive attitude during a recession. This can be a challenging time, but it’s also an opportunity to innovate and grow. Stay focused on your goals and look for ways to improve your products. Remember that every business faces challenges, and that the most successful businesses are those that can adapt to changing circumstances.

According to recent statistics, a survey conducted by the National Federation of Independent Business found that 60% of small business owners feel optimistic about the future of their business. This shows that maintaining a positive attitude is a key factor in weathering tough economic times.

While recession can be a difficult time for businesses, with the right approach, you can overcome it and come out stronger on the other side.

At Express Trade Capital, we provide financing along with logistics solutions, and serve as your consultant – providing advice including:

  • How to structure transactions for maximum profitability.
  • How to most efficiently move your goods from pickup to delivery to your customer.
  • How to manage cash flow and mitigate risk throughout the various stages of production and delivery.
  • How to eliminate bad debts.

To schedule a discovery call and see how ETC can help your business, contact us here ➡️ https://lnkd.in/e84Ti6hg

Express Trade Capital’s feature in California Apparel News, February 2023 edition.

Express Trade Capital’s feature in California Apparel News, February 2023 edition. Mark Bienstock weights in on 2023 climate for manufacturers, retailers and consumers.

”As a result of a difficult 2022 holiday-sales environment, apparel importers and manufacturers are facing dual issues going into 2023. First is bringing their inventory back to a more manageable level. Many companies were dealing with a logistical logjam of too many containers arriving at the same time as well as missing the current season. This forced the retail community to postpone or cancel many orders. The importing and manufacturing trades are still carrying elevated inventory, causing added margin compression to their bottom lines.
Second, the rising interest-rate policy of the Federal Reserve to tame inflation is causing many in the apparel community to resize their respective entity structures as we are potentially heading into a recession. Cost containment throughout the entire manufacturing and selling ecosystem will be paramount to come out stronger once economic recovery is underway.”

At Express Trade Capital, we provide financing along with logistics solutions, and serve as your consultant – providing advice including:

– How to structure transactions for maximum profitability.
– How to most efficiently move your goods from pickup to delivery to your customer.
– How to manage cash flow and mitigate risk throughout the various stages of production and delivery.

This advisory capacity truly sets us apart from other financiers. It’s in our best interests to give you the best advice because our own profitability is determined by your success.

To read this top story on California Apparel News, click here ➡️ https://lnkd.in/gjxxDD84

To schedule a discovery call and see how ETC can help your business, contact us here ➡️ https://lnkd.in/e84Ti6hg

Express Completes $7MM Factoring and $3MM PO Funding Deal for Hong Kong-based Denim Wholesaler.

In September 2022, Express Trade Capital Inc. secured a deal for a Hong Kong-based denim manufacturer who will work directly with top U.S. retailers who previously bought their denim goods through indirect wholesale channels.
 
The prospect reached out to Express to expand their U.S. wholesale presence which would allow them to take advantage of growing interest from top U.S. retailers. Led by AVP Dina Davletshina and VP Drew Cohen, ETC’s team worked directly with the client to develop a uniquely tailored program for their U.S. entity. 
 
To support an expected annual sales revenue of $15MM, ETC created a $7MM factoring facility and a $3MM purchase order funding line. Prior to signing with ETC, the team assisted the client with setting up their U.S. entity and bank account. ETC will also handle the client’s shipping and logistic needs, ensuring goods arrive promptly and POs are fulfilled timely. According to Dina Davletshina, who shepherded the deal to smooth completion: “our team worked hard to overcome several challenges inherent in funding a company that was technically new on paper but had many years of good history overseas. Although this was a non-traditional prospect, their customer base, product line and management team all fit well into our family of clients, so we rolled up our jeans and got creative. Overall, we were able to get the comfort and security we needed to get this deal done right.”
 
ETC specializes in financing companies through factoring, purchase order funding, letters of credit and inventory-based lines of credit. In addition, ETC offers back-end support from logistics to warehousing to credit protection. Since 1993, ETC has helped companies grow, fulfill purchase orders, mitigate risk, and navigate supply chain issues, all while maintaining and enhancing their equity. Our consultative approach leverages our combined 100+ years of experience to ensure clients get maximum support to handle any obstacle.
 
Don’t hesitate to contact us HERE for questions about how Express Trade Capital can help your business. 


How Letters of Credit Can Benefit Your Business During COVID-19

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By: Dina Davletshina, New Business Development

COVID-19 has disrupted nearly every part of our lives. Yes, the public health consequences are tragic. But along with this, small and large businesses alike are feeling significant economic pain. Companies in the consumer goods industry are encountering significant supply chain challenges and quickly shifting consumer spending habits. The retail and the apparel apparel industry in particular are facing their own share of supply chain challenges. The list goes on and on.

During times of such economic upheaval and uncertainty, normalcy disappears, once reliable customers start canceling orders and ask for extended payment terms. Stores suddenly close and it’s unclear whether they will ever open again. Shipping delays become more common and trading partners less flexible.

In this climate, all businesses need to reduce their risk to survive this economic storm. One way to do this is to leverage financial instruments like letters of credit (LCs), which can help achieve the highest risk-adjusted returns.

How Letters of Credit Can Benefit Your Business

Letters of credit offer businesses substantial advantages that are amplified by the uncertainty caused by COVID-19.

Supply chain risks and cancelled orders are a greater risk in this global pandemic, so letters of credit can give you more confidence that you’ll actually get paid.

Most prominently, letters of credit minimize risk for both buyers and sellers. Buyers are that their goods are shipped and documentation is in order before submitting payment. Sellers get the confidence they need to ship goods to their buyers.

Letters of credit are also helpful because they free up capital for both buyers and sellers. By using an LC, buyers do not need to leave deposits to start production. Instead, the LC is opened for the transaction’s full value, letting buyers more efficiently allocate their capital. Suppliers can then borrow against their letter of credit, which can provide them with more liquidity before the transaction closes. It is a win-win for both buyers and suppliers. 

Buyers and sellers may be transacting with new parties or others they may not fully trust, letters of credit can include provisions that must be satisfied before the transaction is completed. This can include everything from inspection of the delivered goods to specific delivery times. These provisions can ensure that your goods arrive in the precise manner that you expect – if they don’t, you have the option to reject the goods without payment or to seek a discount for the suppliers errors-

Helping Business Go Forward

It’s unclear when the COVID-19 crisis will end. In the meantime, business has become inherently riskier. There’s a greater chance that your suppliers and customers won’t pay for your goods and services. Because of this, letters of credit can help you continue business as usual while minimizing risk and preserving cash flow. For these reasons, we encourage you to leverage LCs when possible throughout this global pandemic.

At Express Trade Capital, we are happy to help you leverage all the the benefits of letters of credit. Banks require you to jump through several hoops (like collateral requirements or a prior credit relationship with the bank) to obtain a letter of credit. At Express Trade Capital, we have removed these restrictions by allowing clients to use our already existing LC facilities with out banks, thereby allowing you to quickly obtain LCs for your specific business needs without onboarding to a bank.

To learn more about how we can help you, don’t hesitate to click here.

If You Import from China – US and China have come to a decision regarding tariffs

Carli Valinoti, Express Trade Capital

Chinese President Xi Jinping with President Donald Trump in June in Japan. They are the primary actors in the longest-running, most serious trade war in history.
via Getty Images/WSJ

After months of negotiation, the US and China have announced that they have come to an agreement on trade. The US will cut the current taxes on $120 billion of Chinese goods from 15% down to 7.5% and has decided to not move forward with adding tariffs to the rest of the $160 billion Chinese goods. This will take effect on December 15, 2019. A 25% tariff rate will continue to stay in place on approximately $250 billion worth of US goods. In return, China has agreed to increase its purchases of US goods and services along with around $40-50 billion in agriculture products.

For questions on how this affects your imports from China, contact our logistics office for further assistance. Contact@expresstradecapital.com

Short-Term Future for Retail: Not Looking Great

By: Carli Valinoti – Express Trade Capital, Inc.

It’s not uncommon in today’s retail market that large companies who have been around for years are forced to file for bankruptcy. With growing competition from online retailers, including Amazon, stores have continued to see a decrease in foot traffic and overall sales. Retail stores have accrued debt from overstocking and increasing rent prices. If large, well known retailers such as Forever 21, Barneys New York, and Payless can’t beat the online retail presence, what does the future hold for smaller retailers?

Even with the upcoming holiday season, retail sales are projected to decline. According to the US Commerce Department, retail sales fell in September by 0.3%, the first time since February. Concerns that manufacturing-led weakness and trade tariff challenges are hitting the broader market could potentially have a negative affect on consumers spending habits. If consumers decide to keep their spending to a minimum, retailers should prepare for the potential continuation of declining sales.

expresstradecapital.com
212 997 0155

Section 301 Tariffs Increase to 30 Percent on Chinese Goods Suspended

After meeting with Vice Premier Liu He of the People’s Republic of China, President Trump announced in a news release on October 11, 2019 that the duty increase from 25% to 30% on List 1, 2, and 3 products would be suspended. A final decision will be made later regarding the additional duties scheduled to go into effect December 15, 2019 for List 4B commodities.

Information regarding the phase one deal can be found in the White House news release here.

IF YOU IMPORT FROM THE E.U.

Following a World Trade Organization decision paving the way, the U.S. Trade Representative (“USTR”) has published a list of products form E.U. origin which will be subject to additional duty rates of 10% or 25% ad valorem, effective October 18, 2019.

We expect that a FEDERAL REGISTER notice will be published with the details including confirming the definition of the October 18 effective date; effective dates are commonly based on the date of entry. 

A link to the list of products, countries and additional tariff rates may be accessed at:  https://ustr.gov/sites/default/files/enforcement/301Investigations/EU_Large_Civil_Aircraft_Final_Product_List.pdf

As with other tariffs, close coordination with your carrier and EXPRESS representative is needed to avoid duties assessed to shipments arriving before the effective date.  EXPRESS Trade Capital, Inc. is available to answer your questions, help assess impact to your business and discuss mitigation strategies. Reach out to us at logistics@expresstradecapital.com