SinoHub, Inc., the growing China-based electronic supply chain management services company, today announced a dramatic vote of confidence from the financial market in the form of a $6.4 million bank line. The new line is being made available through the Shenzhen branch of the Hangzhou Bank, and is expected to be used for continued expansion of SinoHubâ€™s electronic component procurement fulfillment and component sales business lines in China.
Under the terms of the agreement, Hangzhou Bank will issue Letters of Credit (LC) to SinoHub Shenzhen, with a 20% cash deposit requirement on all LCs. The bank will issue LCs to SinoHub for terms up to 120 days, with interest of at least 1.1 times the base deposit interest rate, which is currently set at 4.12% by the Peopleâ€™s Bank of China. Up to $1.46 million of the line may be used as a revolving cash line. The bank line expires on April 6, 2010.
SinoHub was founded in 2000 by entrepreneur Harry Cochran and electronic component industry veteran Lei Xia, and conducts almost all operations in the Peopleâ€™s Republic of China through its wholly-owned subsidiary SinoHub Electronics Shenzhen Limited. SinoHub is considered a technology leader in the field of supply chain management (SCM) for electronic components, offering advanced services in import/export, warehousing, and logistics. The company is currently leveraging its relationships with electronic component suppliers, design houses, and manufacturers that want to improve their procurement/fulfillment and component sales operations.
Harry Cochran, SinoHub CEO, emphasized the significance of the funding: â€œWe are experiencing increasing demand in our procurement-fulfillment and component sales business lines so we expect to be able to put these new funds to work in short order. We are pleased that Hangzhou Bank has decided to back SinoHub, and we are honored to be the first major loan recipient from their new Shenzhen branch.â€
Hangzhou Bank Shenzhen branch director Ren Xia Guang expressed the bankâ€™s confidence in SinoHub: â€œSinoHub’s business model and the strong platform they have built to support it are unique in China. We are delighted to add a company with such great potential to our growing portfolio of commercial customers.â€