Factoring-New solution for trade finance

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• Alternative Financing Strategies
• for Small to Mid Size Businesses
• Presented by
• Neisha Pereira
• VP Operations of 1st PMF Bancorp (U.S. Parent)
• Contact neisha_at_pmfbancorp.com / [phone]
  x206

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Summary

• Background Services of 1st PMF Bancorp
• Background on Baoli Investments (PMFs China
  subsidiary)
• Alternative Funding Strategies
• Trade Finance
• Minority Loans
• And Guarantees
• CASE STUDY
• Foreign Trade Financing

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1st PMF Bancorp

• Founded in 1985
• Commercial Bank Lender for SME
• (Small Medium Size Enterprises)
• United States Ex-Im Bank Lender
• Certified Minority Lender (minority certification
  is required by National Minority Development
  Council (www.nmsdcus.org )

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1st PMF Bancorp Services

• PMF LENDING BUSINESS SERVICES
• A. Providing Working Capital Solutions to Medium
  Sized Businesses as Direct Lender
• -Trade Financing
• -Minority Loans for businesses
• -Receivable Purchase Order Financing
• B. Credit and Receivable Management Services
• - Credit Evaluations on U.S and Chinese Firms
• - Complete On-Line Accounting for all Clients
• - Collection and Legal Support in US and China,
  if needed
• - Invoice Guarantee against Customer
  Non-payment (China U.S.)
• C. New Customer Introduction through the
  Minority
• Program (i.e. Home Depot, Honeywell, etc)

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Baoli Investments Services

• Baoli was setup in China in 2004 (as PMFs WOFE)
• Provides support/consulting services to U.S.
  Companies
• -Sourcing Suppliers (i.e. locate, qualify,
  negotiate price, inspect goods, finance via PMF,
  etc
• Provides Supplier Due Diligence Services/ Credit
  Reports on Chinese Companies
• Provides Legal and Staff Support for China market
  
• Websites www.pmfbancorp.com.cn
• www.pmfbancorp.com

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What is Trade Financing?

• The financing of goods/product from one country
  to another usually performed by intermediary
  bank/trading company.

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Trade Finance Strategy
(1) Issues PO
Importer
U.S. Customer
Chinese Supplier
(4) Goods/Invoice
(4) Goods
(2) Issues PO for Imported Product
(3) WITHOUT PMF Importer makes CASH PAYMENT in
advance (no trade financing hurts cash flow)
PMF
(5) Payment to PMF Bancorp lock box
(3) WITH PMF PMF MAKES PAYMENT/GUARANTEE
(with PMF approved PO Trade Financing)
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Results of PMFs Trade Financing

• OUR CUSTOMERS ARE ABLE TO
• Purchase/ Finance more imported goods without
  impacting domestic working capital
• Professionally manage foreign purchase of goods
  via our Chinese Structure
• ---i.e. Inspections of goods,
• Support Staff, Legal,
  etc.
• Implement Risk Management tools (i.e. L/C, D/A,
  Invoice/Guarantee with Open terms, etc.)

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Minority Loan Program-Unique PMF Program

• Certified Minority Lender via National Minority
  Business Dev. Council
• Requires certification via the Southern
  California Minority Business Development Council
  (http//www.scmbdc.org/join/check.asp)
• Requires SME to be working with one of the
  corporate members
• Requires SME to justify use of funds
• Loans amortized over 4 to 10 yrs
• Loans up to 1 million
• Requires Limited Financials strength
• Requires proof Management capabilities for order
• Requires Approval by Certified Lender (i.e. PMF
  Bancorp)

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PMFs typical Client

• -Not traditionally Bankable due to insufficient
  collateral
• -Annual Sales between 500,000 to 20 million
• -May have weak Cash flow
• -May have weak 2nd Collateral Source
• -May have Negative Profits/Equity (trends must be
  positive)
• -Must have positive Sales Outlook
• -Must have Quality Purchase Orders and/or
  Receivables to drive this transaction
• -Must have Experienced Management with track
  record

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Case Study Trade, A/R Finance and Minority Loan

• SITUATION
• PMFs MANUFACTURING MINORITY CLIENT first
  approach PMF producing tools for big box stores
  and had annual sales of 2 million U.S. (also no
  profits for the last 2 yrs due product shift,
  but.)
• Clients International Sales were rapidly
  growing
• Additionally, Client needed Loan to produce
  tooling for 5 products
• Supplier Terms and Customers demanding 60 to 90
  day Terms

• PMFs SOLUTION
• Provided Trade Financing and PO Financing to
  accelerate and ease cash-flow so suppliers could
  be paid early for supplier discounts and
  company could continue to grow sales
• To provide eligibility on financing International
  (A/R) Customers
• To provide Guarantees to Foreign Suppliers
• To provide Minority Loan for tooling in China

• RESULTS
• 1 year later, PMF provided cash-flow to grow
  CLIENTs sales from 2 to 5 million without any
  losses.

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Thank youand for questions contact

• Neisha Pereira, VP OPERATIONS
• 1st PMF Bancorp
• Neisha_at_PMFbancorp.com
• 001(310) 858-6696 x206

• Freda Liang, General Manager in China
• Baoli Investments
• Freda_at_PMFbancorp.com
• 0086(755)83734304