Bank Loans

6 Months Ended

Jun. 30, 2013

Bank Loans [Abstract]

BANK LOANS

NOTE 5   BANK LOANS

Bank loans represent amounts due to various banks and are generally due on demand or within one year. These loans can be renewed with the banks. Bank loans consisted of the following at June 30, 2013 and December 31, 2012:

Bank	June 30, 2013		December 31, 2012
Nanjing Bank	$	14,079,204	$	16,743,277
Shanghai Pudong Development Bank		6,464,000		7,014,833
Bank of Communications		9,703,498		6,953,834
HSBC		2,424,000		5,414,316
Everbright Bank		3,232,000		3,166,000
China Minsheng Bank	1,062,152			4,239,800
Bank of China	5,670,220			3,387,620
Ping An Bank	572,228			-
Hua xia Bank		1,616,000		-
	$	44,823,302	$	46,919,680

On August 2, 2010, Goldenway entered into a revolving line of credit agreement with Nanjing Bank, which allows the Company to borrow up to approximately $8.08 million (RMB50 million). The line of credit is guaranteed by Jiangsu Ever-Glory International Group Corp. (“Jiangsu Ever-Glory”), an entity controlled by Mr. Kang, the Company’s Chairman and Chief Executive Officer. The line of credit is also collateralized by the Company’s property and equipment. As of June 30, 2013, Goldenway had borrowed $8.08 million (RMB50 million) under this line of credit from Nanjing Bank with an annual interest rate of 5.88% and due on various dates from July 2013 to October 2013. Approximately $1.61 million (RMB10 million) was repaid subsequent to June 30, 2013..

On May 11, 2012, Ever-Glory Apparel entered into a line of credit agreement for approximately $9.70 million (RMB60 million) with Nanjing Bank and guaranteed by Jiangsu Ever-Glory. As of June 30, 2013, Ever-Glory Apparel had borrowed $3.23 million (RMB 20 million) under this line of credit with an annual interest rate ranging from 5.88% to 6.3% and due on July 2013. Ever-Glory Apparel had also borrowed $1.15 million from Nanjing Bank with an annual interest rate of 2.28%, due in July 2013, and collateralized by approximately $1.7 million of accounts receivable from wholesale customers.  At June 30, 2013, approximately $5.32 million was unused and available under this line of credit. Approximately $4.38 million was repaid subsequent to June 30, 2013.

On April 10, 2012, LA GO GO entered into a revolving line of credit agreement with Nanjing Bank, which allows the Company to borrow up to approximately $3.23 million (RMB20 million). The line of credit is guaranteed by Jiangsu Ever-Glory and Mr. Kang. As of June 30, 2013, LA GO GO had borrowed $1.62 million (RMB10 million) under this line of credit with annual interest rates ranging from 6.29% to 6.44% and due on various dates from September 2013 to October 2013. At June 30, 2013, approximately $1.61 million (RMB10 million) was unused and available under this line of credit.

On January 4, 2011, Goldenway entered into a revolving line of credit agreement for approximately $6.46 million (RMB40 million) with Shanghai Pudong Development Bank. As of June 30, 2013, Goldenway had borrowed the maximum amount available under the line of $6.46 million (RMB40 million), with an annual interest rate of 6.3%. These loans are collateralized by certain properties and land use rights of Goldenway, and are due in November 2013.

As of June 30, 2013, Ever-Glory Apparel had borrowed $6.62 million (RMB 41 million) from the Bank of Communications with an annual interest rate ranging from 5.6% to 6.3% and due on various dates from October 2013 to February 2014. The loan is guaranteed by Jiangsu Ever-Glory and Mr. Kang.  This loan is also collateralized by assets of Jiangsu Ever-Glory’s equity investee, Nanjing Knitting, under a collateral agreement executed among the Company, Jiangsu Ever-Glory, Nanjing Knitting and the bank. Ever-Glory Apparel had also borrowed $2.27 million from the Bank of Communications with an annual interest rate of 3.4%, due on various dates from July to September 2013, and collateralized by approximately $5.2 million of accounts receivable from wholesale customers.

As of June 30, 2013, LA GO GO had borrowed $0.81 million (RMB5 million) from the Bank of Communications with annual interest rate of 6.06% and due in July 2013. This loan is guaranteed by Jiangsu Ever-Glory and Mr. Kang. Approximately $0.81 million (RMB5 million) was repaid subsequent to June 30, 2013.

On July 29, 2011, Ever-Glory Apparel and Perfect Dream collectively entered into a secured banking facility agreement for a combined revolving import facility, letter of credit, invoice financing facilities and a credit line for treasury products of up to $7.0 million with the Nanjing Branch of HSBC (China) Company Limited (“HSBC”). This agreement is guaranteed by the Company and Mr. Kang. As of June 30, 2013, Ever-Glory Apparel had borrowed $2.42 million from HSBC with annual interest rate of 5.6%, due on various dates from July to August 2013, and collateralized by approximately $4.5 million of accounts receivable from wholesale customers. These bank loans are to be repaid upon receipt of payments from customers. As of June 30, 2013, approximately $4.58 million was unused and available. Approximately $1.62 million was repaid subsequent to June 30, 2013.

On August 21, 2012, Ever-Glory Apparel entered into a line of credit agreement for approximately $13.41 million (RMB83 million) with Everbright Bank guaranteed by Jiangsu Ever-Glory and Mr. Kang.  The line of credit is also collateralized by assets of Jiangsu Ever-Glory under a collateral agreement executed among the Company, Jiangsu Ever-Glory and the bank.  As of June 30, 2013, Ever-Glory Apparel had borrowed $3.23 million (RMB20 million) from Everbright Bank, with annual interest rate of 6.3% and due in September 2013. At June 30, 2013, approximately $10.18 million (RMB63 million) was unused and available under this line of credit.

As of June 30, 2013, Ever-Glory Apparel had borrowed $1.06 million from China Minsheng Bank, with annual interest rate of 2.93% and due in September 2013 and collateralized by approximately $1.6 million of accounts receivable from wholesale customers.

On November 16, 2012, Ever-Glory Apparel entered into a line of credit agreement for approximately $4.20 million (RMB26 million) with Bank of China guaranteed by Jiangsu Ever-Glory and Mr. Kang.  The line of credit is also collateralized by assets of Jiangsu Ever-Glory under a collateral agreement executed among the Company, Jiangsu Ever-Glory and the bank.  As of June 30, 2013, Ever-Glory Apparel had borrowed $1.62 million (RMB 10 million) under this line of credit with annual interest rate of 6.05% and due on December 2013. Ever-Glory Apparel had also borrowed $4.05 million (including $1.79 million and RMB14 million) from Bank of China with an annual interest rate ranging from 1.8% to 6.72%, due on various dates from July to September 2013, and collateralized by approximately $7.2 million of accounts receivable from wholesale customers. Approximately $0.4 million was repaid subsequent to June 30, 2013.

As of June 30, 2013, Ever-Glory Apparel had borrowed $0.57 million from Ping An Bank, with annual interest rate of 6.3%, due in September 2013, and collateralized by approximately $0.72 million of accounts receivable from wholesale customers.

As of June 30, 2013, Ever-Glory Apparel had borrowed $1.62 million (RMB 10 million) from Hua Xia Bank, with annual interest rate of 6.6% and due in April 2014. This loan is guaranteed by Goldenway.

Total interest expense on bank loans amounted to $736,695, $1,528,224, $458,703 and $1,004,744 for the three and six months ended June 30, 2013 and 2012, respectively.