Tradewind Finance Provides US$2.5 Million Non-Recourse Export Factoring Facility to Vietnamese Cable Exporter
Tradewind Finance has provided a US$2.5 million non-recourse export factoring facility to a Vietnamese cable producer. This facility, arranged by Tradewind’s Shanghai office, converts export receivables into immediate liquidity and provides credit protection to buyers in the United States and Australia.
With this structure, the exporter maintains 90-day open account payment methods without burdening working capital.
How Longer Payment Terms Can Strain Producers’ Liquidity
This client is a cable manufacturer with over 30 years of operation in Vietnam. For much of that period, the company relied on advance payments and Letters of Credit (L/C) to manage its export transactions.
As global cable supply competition intensified, buyers began requiring open account payment methods as a condition of ongoing business. The exporter adapted to these needs, but this created a significant gap between production costs and payment receipt times.
The company has export credit insurance that provides partial protection against buyer default risks. However, a residual 10-20 per cent risk remains uncovered, and the insurance does not address working capital shortfalls from longer payment cycles. Despite a strong order portfolio and good buyer relationships, the exporter’s cash position faces pressure.
How the Facility Works: Converting Receivables into Working Capital
Tradewind structured a non-recourse export factoring facility aligned with the client’s trade flows to the United States and Australia. The facility operates as follows:
Advance funding: Tradewind provides up to 90 per cent advance funding on the value of each invoice immediately after shipment, converting receivables into cash availability.
Credit protection: As a non-recourse facility, Tradewind assumes the buyer’s credit risk. This structure offers the exporter 100 per cent credit protection against buyer default or bankruptcy.
Collections management: Tradewind handles receivables administration and collection processes, reducing the operational burden on the exporter’s finance team.
This structure replaces the partial protection previously offered by export credit insurance with a more comprehensive solution that covers financing gaps and full buyer credit risk on approved receivables.
Implications for the Exporter
With this facility, the exporter can offer 90-day payment terms to buyers without impacting internal cash flow. Production cycles are no longer tied to buyer payment timings, and the company has a stable liquidity source directly linked to its shipping activities.
The non-recourse structure also eliminates a layer of financial uncertainty. Instead of relying on insurance with residual risks, the exporter now operates with full credit protection on approved buyers through the Tradewind facility.
Reasons for Choosing Tradewind
Tradewind was selected for its ability to structure receivables financing solutions for cross-border trade flows involving multiple buyer markets. Key factors in the decision include:
Over 25 years of experience in international trade finance, specialising in export factoring across Asia, the Americas, and Europe.
Local structuring capability through Tradewind Finance’s Shanghai office, supported by direct understanding of Vietnam’s export markets.
Tailored financing structures aligned with the client’s trade corridors and buyer payment terms.
Consistent execution and clear communication throughout the onboarding process.
Facility Designed Based on Client’s Trade Flows
“This facility provides the client with a reliable working capital source directly tied to their export activities,” said Chris Chang, Regional Commercial Director for the Far East at Tradewind Shanghai. “By structuring the solution around their specific trade flows to the United States and Australia, we address both financing gaps and credit risk exposure in a single facility.”