NOTE 7 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. Short term bank loans consisted of the following as of December 31, 2016, and 2015.

	December 31, 2016		December 31, 2015
Bank	(In thousands of U.S. Dollars)
Industrial and Commercial Bank of China	$	11,232	$	16,940
Nanjing Bank		9,360		13,951
China Everbright Bank		2,880		3,121
Bank of Communications		2,880		3,080
China Minsheng Banking		2,880		3,080
HSBC		-		3,129
Ping An Bank		-		1,540
	$	29,232	$	44,841

In January 2014, Goldenway entered into a line of credit agreement with Industrial and Commercial Bank of China, which allows the Company to borrow up to approximately $8.6 million (RMB60.0 million). These loans are collateralized by the Company’s property and equipment. As of December 31, 2016, approximately $8.6 million was unused and available under this line of credit.

In September 2015, Ever-Glory Apparel entered into a line of credit agreement for approximately $17.3 million (RMB120.0 million) with Industrial and Commercial Bank of China and collateralized by assets of Jiangsu Ever-Glory’s equity investee, Nanjing Knitting, under a collateral agreement executed among Ever-Glory Apparel, Nanjing Knitting and the bank. As of December 31, 2016, Ever-Glory Apparel had borrowed $11.2 million (RMB 78.0 million) under this line of credit with annual interest rates ranging from 4.4% to 4.6% and due on various dates from April to December 2017. As of December 31, 2016, approximately $6.1 million was unused and available under this line of credit.

In June 2016, Goldenway entered into a line of credit agreement with Nanjing Bank, which allows the Company to borrow up to approximately $7.2 million (RMB50.0 million). These loans are 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. These loans are also collateralized by the Company’s property and equipment. As of December 31, 2016, approximately $7.2 million was unused and available under this line of credit.

In June 2016, Ever-Glory Apparel entered into a line of credit agreement for approximately $8.6 million (RMB60.0 million) with Nanjing Bank and guaranteed by Jiangsu Ever-Glory, Mr. Kang and Goldenway. As of December 31, 2016, Ever-Glory Apparel had borrowed $7.2 million (RMB50.0 million) from Nanjing Bank with an annual interest rates ranging from 3.3% to 3.8% and due on various dates from January to March 2017. As of December 31, 2016, approximately $1.4 million was unused and available under this line of credit.

In October 2015, LA GO GO entered into a revolving line of credit agreement with Nanjing Bank, which allows the Company to borrow up to approximately $2.9 million (RMB20.0 million). The line of credit is guaranteed by Mr. Kang and Goldenway. As of December 31, 2016, LA GO GO had borrowed $2.2 million (RMB15.0 million) under this line of credit with an annual interest rate of 5.0% and due in January 2017. As of December 31, 2016, approximately $0.7 million (RMB5.0 million) was unused and available under this line of credit.

In July 2016, Ever-Glory Apparel entered into a line of credit agreement for approximately $5.8 million (RMB40.0 million) with China Everbright Bank and guaranteed by Goldenway and Mr. Kang. These loans are also collateralized by Jiangsu Ever-Glory’s property. As of December 31, 2016, Ever-Glory Apparel had borrowed $2.9 million (RMB20.0 million) under this line of credit with an annual interest rates ranging from 2.8% to 3.0% and due on various dates from May to November 2017. As of December 31, 2016, approximately $2.9 million was unused and available under this line of credit.

In June 2014, LA GO GO entered into a line of credit agreement for approximately $4.8 million (RMB33.0 million) with the Bank of Communications and guaranteed by Jiangsu Ever-Glory, Ever-Glory Apparel and Mr. Kang. As of December 31, 2016, LA GO GO had borrowed $2.9 million (RMB20.0 million) from the Bank of Communications with annual interest rates ranging from 4.6% to 5.0% and due on various dates from June to August 2017. As of December 31, 2016, approximately $1.9 million was unused and available under this line of credit.

In December 2016, LA GO GO entered into a line of credit agreement for approximately $2.9 million (RMB20.0 million) with China Minsheng Banking and guaranteed by Ever-Glory Apparel and Mr. Kang. As of December 31, 2016, LA GO GO had borrowed $2.9 million (RMB20.0 million) from China Minsheng Banking with an annual interest rate of 4.6% and due in December 2017.

In January 2015, Ever-Glory Apparel and Goldenway 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 $12.6 million with the Nanjing Branch of HSBC (China) Company Limited (“HSBC”). This agreement is guaranteed by the Company and Mr. Kang. The company have also pledged $2.5 million (RMB 17.4 million) of the deposit for the establishment of letters of credit, these bonds were received from bank in March 2017. As of December 31, 2016, approximately $12.6 million was unused and available under this line of credit.

In March 2016, Ever-Glory Apparel entered into a line of credit agreement for approximately $3.6 million (RMB25.0 million) with Bank of China and guaranteed by Jiangsu Ever-Glory. These loans are also collateralized by assets of Jiangsu Ever-Glory’s equity investee, Chuzhou Huarui, under a collateral agreement executed by Ever-Glory Apparel, Chuzhou Huarui and Bank of China. As of December 31, 2016, approximately $3.6 million was unused and available under this line of credit.

In December 2014, LA GO GO entered into a line of credit agreement for approximately $5.2 million (RMB36.0 million) with the China Citic Bank and guaranteed by Jiangsu Ever-Glory, Ever-Glory Apparel and Mr. Kang. As of December 31, 2016, approximately $5.2 million was unused and available under this line of credit.

All loans have been repaid before or at maturity date.

Total interest expense on bank loans amounted to $2.0 million and $2.6 million for the year ended December 31, 2016 and 2015, respectively.

The annual average interest rate of bank loans was 5.39% and 5.00% for the year ended December 31, 2016 and 2015, respectively.