How to raise capital in China?
July 13, 2011 10:02 PM   Subscribe

How can my Hong Konger friend find some money/investors for his rapidly growing fabric company as soon as possible in China?

My friend started a fabric trading partnership in China approximately a year ago and the company has grown faster than his expectations and he's facing the classic capital squeeze / bootstrap problem.

They're getting orders left and right due to excellent product quality, fast turnaround time, and customer relationship, however they're having difficulty raising enough capital to cover the gaps in cash flow.

The business is solid and making money, but they made the classic blunder of not having a capital plan from the onset. Also since they are a Wholly Owned Foreign Enterpise (WOFE) it's extremely difficult, if not impossible to get loans from Banks in China.

Which brings me to my question, where and how can they raise capital in China (or anywhere)? Where can they find potential investors on a somewhat short notice?
posted by pakoothefakoo to Work & Money (1 answer total) 1 user marked this as a favorite
Technically, investors are not needed if they have buyers. I have worked as an EMA (Export Management Agent) for many companies in their situation who want to export to the U.S. or other countries

If they have buyers and interest, an EMA can handle the orders (and a small percentage for the effort) and work with U.S and sometimes overseas banks to get "Letters of Credit" (if the buyers have trouble coming up with the cash) or even arrange for import/export financing if they go through a few hoops or are registered distributors for the foreign company.

How much cash are you talking about?
posted by emjay at 6:17 PM on July 14, 2011

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