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Loans Payable | 3 Months Ended
--- | ---
Mar. 31, 2012
Loans Payable | (7) Loans Payable Short-term bank loans
|  |  |  |  | March 31, 2012 |  |  | December 31, 2011 |
Industrial & Commercial Bank of China |  |  | (a) |  |  | $ | - |  |  | $ | 2,046,503 |
Industrial & Commercial Bank of China |  |  | (b) |  |  |  | 791,327 |  |  |  | 787,116 |
Industrial & Commercial Bank of China |  |  | (c) |  |  |  | 1,978,318 |  |  |  | - |
Total short-term bank loans |  |  |  |  |  | $ | 2,769,645 |  |  | $ | 2,833,619 |
| (a) | On March 16, 2011, the Company obtained from the Industrial & Commercial Bank of China an accounts receivable factoring facility with a maximum credit limit of $2,046,503 as of December 31, 2011. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remain in the Company’s books at all times, are not fully collected. The term of the factoring facility expired on February 27, 2012 and carried an interest rate of 6.4236% per annum, which is 106% of the prime rate for the loan set forth by the People’s Bank of China at the time of funding. The Company paid off the balance of the factoring facility on February 24, 2012.
| (b) | On August 18, 2011, the Company obtained from the Industrial & Commercial Bank of China a new accounts receivable factoring facility with a maximum credit limit of $791,327 as of March 31, 2012. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remain in the Company’s books at all times, are not fully collected. The term of the factoring facility expires on August 15, 2012 and carries an interest rate of 8.528% per annum.
| (c) | On March 13, 2012, the Company obtained from the Industrial & Commercial Bank of China another accounts receivable factoring facility with a maximum credit limit of $1,978,318 as of March 31, 2012. Under the factoring agreement, the bank has recourse against the Company if the receivables, which remain in the Company’s books at all times, are not fully collected. The term of the factoring facility will expire on January 4, 2013 and carried an interest rate of 8.856% per annum as of March 31, 2012, or 3.5% plus the prime rate for the loan set forth by the People’s Bank of China at the time of funding.
As of March 31, 2012 and December 31, 2011, short-term borrowings were $2,769,645 and $2,833,619, respectively. No unsecured bank loans. The factoring facility was secured by the Company’s accounts receivable in the amount of $3,974,879 and $3,956,948 as of March 31, 2012 and December 31, 2011, respectively. As of March 31, 2012 and December 31, 2011, the Company had no unutilized credit facility with the banks. The average short-term borrowing rates for the three months ended March 31, 2012 and 2011 were approximately 7.49% and 5.42%, respectively. Long-term loans from credit union As of March 31, 2012 and December 31, 2011, loan payable to Rural Credit Union of Xushui County (formerly Rural Credit Cooperative of Xushui County) amounted to $5,721,295 and $5,690,852. On March 31, 2011, the Company entered into a three-year term loan agreement with the Rural Credit Union of Xushui County for an amount that is $1,558,915 as of March 31, 2012 and $1,550,619 as of December 31, 2011. The loan is guaranteed by an independent third party. Interest payment is due quarterly and bears the rate of 0.72% per month. On June 10, 2011, the Company entered into a new term loan agreement with the Xushui County Rural Credit Union for an amount that is $4,162,380 as of March 31, 2012 and $4,140,233 as of December 31, 2011. The new loan is secured by its manufacturing equipment of $10,352,907 and $10,646,244 as of March 31, 2012 and December 31, 2011, respectively and will mature on June 9, 2013. Interest payment is due quarterly and bears the rate of 0.72% per month. Total interest expenses for the short-term bank loans and long-term loans for the three months ended March 31, 2012 and 2011 were $171,015 and $67,686, respectively. Future maturities of short term and long term loans payable were as follows as of March 31, 2012:
March 31, |  |  | Amount |
2013 |  |  | $ | 2,769,645 |
2014 |  |  |  | 5,721,295 |
|  |  | $ | 8,490,940 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 + Details
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