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Troy Cory Show
Hong Kong Triad /
Follow The Money
Join the World of "WiFi , Land-lines and money transfers"
In the world of international trade, Intermediaries are those third party facilitators who act as your agent in monetizing your goods, products and services. Trade Acceptances, Advances, Drafts, and borrowing between friends and getting friendly Cash Money . . . Just gets easier with an Intermediary.
As teenagers, group dynamics are picked up in highschool. We learned that money talks the walk when people pair off, whisper and share point-of-views. As adults, we learn that liquidity and knowing how to commoditize your legacy -- speaks volumes in building a dynamic "Cliquish" group society -- to moneitize your business plans.
"Both borrowers and lenders can profit -- and stay friends -- as long as they're professional about it and put the details in writing," says Troy Cory, chief executive of China Expo 2000, a U.S.A. / China, .- based entity. TeleKey/Lending, during the last 10 years has been referred to by its users as: TeleKey/Lending, TeleKey Trade Acceptance, CircleLending, InnerCircleLending, and Signet TeleKey Money Facilitators.
The Internet has brought on, "Click Money," and "Click/Lenders." The facilitators are usually referred to in the hedge fund industry as: Intermediaries, Finders, or Middlemen. The Intermediary charges a fee to facilitate all kinds of loans, included, but not limited to local and international business loans and mortgages, but between people who are friends or relatives.
Why pay a go-between to get a loan from Mom? Jiang Yang did it because he wanted to document for the U.S. Pass Port officials, and the U.S. Internal Revenue Service that the $475,000 he received from his parents in Beijing was really a mortgage loan -- not a gift -- and that therefore the interest was tax deductible on his first U.S. Income Tax Return.
What's the benefit of using a go-between, like ChinaExpo, for a loan between friends living in either China or the U.S.A.?
Part 02 / INTERMEDIARY
A third party will do the math and the paperwork, which many people would find difficult.
For example, an ordinary calculator can tell you that simple interest on a $25,000 loan at 5% would be $1,250 annually. But determining the monthly payment necessary to bring the balance of a $25,000 loan down to zero after three years is more complicated. (It's $783.41.)
An intermediary will also take care of drafting and filing any required paperwork.
For example: with any loan or foreign trade exchange between countries, there should be a signed Non-Disclosure / Non-Circumvention Agreement, an Intermediary Agreement, stating the amount of money requested, a Finders Fee Agreement, and promissory note, a legally binding promise to repay the money, if accepted by the Lender or trader of goods, product for the monetary service bank.
Mortgage loans usually requires a trust deed and a lien on the property to be filed and recorded with the county, and held by the holder, he/she can flip into a hedge fund security. If the interest on the loan is deductible, whoever collects the payments needs to report to the IRS the amount of interest paid by the borrower, if it's deductible. The interest income received by the lender or holder is taxable.
A third party Intermediary, like ChinaExpo 2000 can keep businessmen from running afoul of some obscure tax rules, Yang said. Specifically, if the interest rate on a loan is "forgiven," or is below a certain threshold set annually by the IRS based on market interest rates, the agency considers the money saved by the borrower to be a "gift." If the gift exceeds a certain amount, it may be subject to gift tax.
"In our mind, having a third party involved in any kind of monetary or trade-out transaction would mean there would be no question for the federal government -- or anyone else -- that a loan is a loan, that was created to be paid back with interest. ChinaExpo 2000 does the reporting for its clients, to prove-up the transaction, that usually exceeds $10-Million.
About $89 billion in loans between people who are friends or relatives are made each year, and another $trillion between the citizens of signatory member WMF countries. Yang said, "if the terms are vague and the problems aren't spelled out in the Trade Acceptance Agreement's, the parties may feel awkward about the options and financial arrangements. This is always the case especially after the "Acceptance of the Monetary Advance," and the borrower encounters problems in delivering his goods, products or services to the "Circle/Lender." Or, as Troy puts it: -- "The trick is to conserve the valuable legacy resources. Make wise decisions about how to use and cut cost."
"The typical behavior is to say, 'OK, here's the Trade Acceptance you requested for $100,000,000. I'd like you to pay me back in ten years,' " Yang said. "There are no details. No payment plan, no government permits. That creates a lot of uncertainty."
Done correctly, loans and trade acceptances between friends or citizens of trusted nations can benefit both sides, he said. As for ChinaExpo 2000's dealings with P.R. China -- since 1988, not only have most of their clients received the interest rate requested, but they have received the value of being the first into China. Of course, it's no longer a secret that the Bank of China has received a competitive return on their Yuan.
Part 03 /
Click/Lending helps arrange
international complicated financing
amongst friendly parties.
Click for YouTube - Troy Cory Show - China Open Door Policy 1988 ...
"China's Open Door Policy To The USA" - VRA4003 - Shanghai TV
02. What's the benefit of using a go-between for a loan between friends?
A third party can keep you from running afoul of some obscure tax rules, Yang said. Specifically, if the interest rate on a loan is below a certain threshold set annually by the IRS based on market interest rates, the agency considers the money saved by the borrower to be a "gift." If the gift exceeds a certain amount, it may be subject to gift tax.
For Yang, TeleKey/Lending filled out the trust deed and promissory note and recorded the lien on his property. The company also sends him bills, processes his payments and sends tax forms to him and his parents.
03. Where do the funds come from to pay for foreign trips and their related Intermediary costs?
Troy says that, "acting as the Intermediary of many TCS, and ChinaExpo trade missions throughout the years commencing in the mid 1980s has been very enlightening -- money wise." My firsthand experience in this $billion arena is: if a U.S. public official is involved, it is often said by the Chinese officials, "that they are damned if they do, and damned if they don't."
Each time a trade mission is being planned, there weighs an internal debate about who's paying for the trip, and as to why a Non-Circumvention - Non-Disclosure Agreement must by signed first, along with a Finder's Fee Agreement, and Trade Acceptance Agreement, amounting to $millions.
Some thought that if these trade mission constituted legitimate government business, the governments for the nations should pay, while others insisted that private companies and individuals should. Still others argued that, out of an excess of caution, some of the costs should be subsidized by political party members, like the member of China Communist Party does.
Private funding is the best way to go, loaded with money partners-, the delegates seeking access and favors from the host nation. If that's the case, the entire trip will be taken for economic cultural/art development motives.
Despite public and media skepticism to the contrary, I have been on enough foreign trade missions to know that they are not vacation-like junkets. On my first TCS concert tour to Shanghai, in 1988, we landed at 2:00 AM. There was a video camera inspection every morning at 4:30 AM. SEE WEBCAST - "OPEN DOOR POLICY."
Nowadays, it is important to understand that government officials traveling on official business representing the U.S. -- are expected to exchange gifts with their hosts, Particularly in Asia. There are centuries-old protocols involving this process. To most Americans, it can seem like a ridiculous amount of ritual involved, down to the order in which gifts are given and to the size of the packages and what's inside. It's a matter of cultural judgment, not "kickbacks."
"My candid sense is that some "Johnny Come Lately's to China," are now piling bogeyman fears about products from China," says Troy. This is about revenge and envy. "After all, China's political agenda is about monetizing its legacy and making sure the 2008 Olympics are successful."
4. Related Stories / What's the disadvantage?
A third party or outside Intermediary costs money. In theory, you could do everything TeleKey/Lending does. If you are good at math, have trusted governmental and banking contacts, you have all of the forms that fulfill the Process; you know IRS rules, and know the cultural indifferences between nations that would save the cost of the Finder's fees.
The fees range from $20,000 to #40,000 just for starters, after a Non-Circumvention Agreement is signed. After the simple Trade Acceptance loan request is excepted and a permit to do business in a foreign company is given, the fee is usually 10% to 20% of the requested amount.
Who figures out the loan terms?
The borrower and the lender.
Yang says that TeleKey/Lending arranges the terms on the international monetary market at the time of appointment. The TeleKey Signet representative usually walks the client through various interest-rate and repayment options to help them determine what's workable. The parties eventually decided on a 10-year payback at 10% to develope an affordable timetable.
What happens if you can't make a payment?
You call China Expo2000 and figure out a way to fix it. "There are many options," Yang said. For example, using our Process Centered Facilitator services, (PCF) -- you may be enabled to make up the missed payment or delivery over the remaining term of the loan. If this happens, the lender will "forgive" the missed payment, giving enough time during the PCF TimeLine period for the joint-venturer assigned to you, to pay the debt for you.
5. Is there a fee to handle the "forgiven transaction takeover" when the loan doesn't go exactly as scheduled?
No. ChinaExpo 2000 used to charge a fee, Yang said, but after realizing that everybody got off the hook by fixing the problem for free under the guidance of the PCF process. The worse scenario is when your foreign partner takes over your equity position in your company.
Does TeleKey/Lending deal with all types of loans?
No. The company handles only mortgages, and business loans. It plans to start a registry/recordation financial security service next year.
What's in it for the lender?
That depends on the loan. In most Commercial Paper cases, the lender cares less about the money. The focus is about enabling a successful foreigner business to enter into a business deal with PR China. The gain of copyrights, trademarks and other intellectually property rights assigned to the lender are more important for competitive values.
They could have charged more, say, a 20% tariff tax, but that would have been less than the market rate on their intellectually property, or talent
"Companies in general are delighted to be doing business in PR China, particularly when they don't trust and have faith in Wall Street's paper tailing," said Yang.
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