International Trade Alliance Program (ITAP)
“A Stable Platform for Accelerated Export Sales Growth”
The Capstone Capital Group, which includes Capstone Trade Partners, Ltd., (Capstone), is a well capitalized, diversified financial investment, merchant banking, and international trading company. The Capstone Capital Group is affiliated with a substantial US based hedge fund and maintains financial relationships with several international funds and financial institutions.
In the trading sector of its business Capstone has, over the past 15 years, developed a unique financial international trading alliance program (ITAP) structure designed to support sales growth for our trade alliance partners in the following areas; export sales, offshore credit management, cash management, logistics, legal and documentary compliance in the USA.
Until early 2004, Capstone limited its ITAP program to U.S. domestic importers, exporters, and manufacturers. As a result of the program's success in the U.S., -- and due to the increasing number of China-based business we encounter -- we have created a modified version of ITAP. Our goal is to provide China-based exporters and manufacturers who sell finished products in the U.S. and E.U., critical support in the areas of working capital, export quality control management, offshore cash management, and guaranteed payment of receivables.
The Capstone ITAP was developed for and is aimed at addressing a very specific group of financial and logistic circumstances and conditions common to the international export sales businesses. The program is intended to help growing exporters literally “TAP” into a full array of export related financial and management services provided by the Capstone Capital Group to its existing client portfolio.
If your business exports finished products to the U.S. and/or the E.U., and your export sales are growing rapidly, and that growth requires ever increasing amounts of working capital then please take a moment to consider the statements below as the may apply to your business:
- Your sales are growing and could grow more if you had additional working capital.
- Your company's sales backlog due to working capital shortfalls is starting to cause problems for its Buyers.
- Most of your sales are export oriented sales to the US and EU.
- Your turn cycle from shipment to receipt of payment is more than 60 days.
- Your offshore Buyers want, "open account terms some up to 90 days" in order to place orders or increase standing orders. But, these arrangements are increasing in your company's unsecured offshore credit risk.
- Your company is having difficulty keeping up with logistics and paperless (EDI) systems of its larger offshore Buyers.
- Your company ships finished goods on open account terms to its offshore accounts.
- Your company is having difficulty ascertaining the credit condition of your offhshore Buyers.
If you feel any of the statements above apply to your business situation, Capstone's ITAP program could potentially be your export sales growth solution.
Here are some other benefits of ITAP you might consider:
As a seller and manufacturer of finished goods, would you benefit if you had the following support when you sell and deliver to an overseas buyer on open account terms?
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The order, when accepted under ITAP, comes with a guarantee of collection and payment eliminating all of your offshore buyer credit risk.
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Even though your sale is made on open account terms to the buyer, 50% to 80% of the purchase price would be paid at shipment by confirmed irrevocable letter of credit by Capstone. The balance is paid as stated in the buyer's Purchase Order.
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All credit and receivable collection work is done by Capstone at no cost to your business.
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All EDI and paperless billing, warehousing, and receivable collections are built into the program.
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Any and all litigation related to non-payment from your Buyer is conducted by Capstone at no additional cost.
The ITAP program can provide all of the benefits listed above and more.
How can your company participate in Capstone’s ITAP program? If it meets the following conditions, it will most likely qualify for ITAP:
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Your company should have existing export sales and purchase orders of $2 million or more per year with rapid projected export growth potential.
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Your Buyers must be credit-worthy.
- The terms of sale and payment to your buyer must be consistent with sales customs and practices for your industry.
If your company meets these conditions, please provide us with the information requested on the attached Information Request form or go to our website at www.capstone-asia.com and double-click on the ITAP Application.
We will review the information you provide and contact you with any questions or to request additional information within a few days. Once all the information we require is received, we will schedule a meeting with you to discuss your business and the best way in which to structure a trade alliance with your company. We can generally write a letter of commitment with a few days of our initial meeting.
Capstone has structured ITAP to meet the needs of a very diversified group of export business situations where speed and flexibility are paramount considerations. Therefore, your business can make use of all or any part of the ITAP program based on your business situation.
The Capstone ITAP program provides your company with the complete solution to export open account sales and the resulting working capital demands these sales create.
ITAP PROVIDES YOUR COMPANY WITH THESE ADDITIONAL BENEFITS:
- An irrevocable documentary letter of credit issued to your company for each approved sale(s) for up to 80% of the Purchase Order amount.
- Complete pre-shipment and post-shipment quality control system to insure the buyer's acceptance of your orders and minimize any possibility of post-shipment quality or acceptance issues.
- The guaranteed payment of all your approved accounts receivable.
- Complete logistical support can be provided including insurance, shipping, customs clearance, warehousing, EDI processing, pick & pack services, and local shipping.
- Total accounts receivable and cash management.
- US corporate establishment, organization, management, maintenance and banking.
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Capstone can tailor its services to your export trading and sales business.
How does the ITAP program work?
It is a simple and easily implemented system of documents and procedures, which will normally be complete in a few weeks. Generally, the ITAP system proceeds in the following manner:
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Capstone reviews your information and request.
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A Capstone representative meets with you to discuss your needs and evaluate how best to structure the ITAP program for your particular business requirements.
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Capstone Issues a Commitment Letter setting out the terms and documentation required to establish an ITAP with your company.
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If you accept Capstone's terms, a closing is arranged. At the closing, a simple set of ITAP documents are executed between your company and Capstone.
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Post the closing, all approved purchase orders are assigned to Capstone.
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Capstone issues an irrevocable letter of credit to your company for each approved purchase order. The face amount of the letter of credit is based on your needs as per the terms of the agreement between your company and Capstone.
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Your company draws on the LC according to the agreed terms.
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The goods are shipped, delivered, and accepted by your Buyer at which time a receivable is created.
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The receivable is paid to Capstone.
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Capstone deducts the LC amount and any other associated cost including its charges and remits the balance to your company's account.
The list above is a general outline of the Capstone International Trade Alliance Program (ITAP)process. Of course, in actual business situations, this process is subject to varying degrees of complexity based on the needs and structure of each company and the unique demands of specific transactions.
Capstone's senior executives have decades of experience in international trading, trade finance, and structuring commercial trade transactions. They have designed ITAP to provide a complete funding and service package from order to settlement, allowing your business to grow based on its sales and market performance.
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