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Loans Payable | 6 Months Ended
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Jun. 30, 2012
Loans Payable | (7) Loans Payable Short-term bank loans
|  |  |  |  | June 30, 2012 |  |  | December 31, 2011 |
Industrial & Commercial Bank of China |  |  | (a) |  |  | $ | - |  |  | $ | 2,046,503 |
Industrial & Commercial Bank of China |  |  | (b) |  |  |  | 1,979,634 |  |  |  | - |
Industrial & Commercial Bank of China |  |  | (c) |  |  |  | 791,853 |  |  |  | 787,116 |
Total short-term bank loans |  |  |  |  |  | $ | 2,771,487 |  |  | $ | 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 March 13, 2012, the Company obtained from the Industrial & Commercial Bank of China another accounts receivable factoring facility with a maximum credit limit of $1,979,634 as of June 30, 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 expired on January 4, 2013 and carried an interest rate of 8.856% per annum as of June 30, 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.
(c) | 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 $791,853 as of June 30, 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.
As of June 30, 2012 and December 31, 2011, short-term borrowings were $2,771,487 and $2,833,619, respectively, and no unsecured bank loans. The factoring facility was secured by essentially all of the Company’s accounts receivable in the amount of $3,053,734 and $3,820,696 as of June 30, 2012 and December 31, 2011, respectively. As of June 30, 2012 and December 31, 2011, the Company had no unutilized credit facility with the banks. The average short-term borrowing rates for the six months ended June 30, 2012 and 2011 were approximately 8.15% and 5.85%, respectively. The average short-term borrowing rate for the three months ended June 30, 2012 and 2011 were approximately 8.76% and 6.07%, respectively. Long-term loans from credit union As of June 30, 2012 and December 31, 2011, loan payable to Rural Credit Union of Xushui County, amounted to $5,725,100 and $5,690,852. On March 31, 2011, the Company entered into a three-year term loan agreement with Rural Credit Union of Xushui County for an amount that is $1,559,951 as of June 30, 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 term loan agreement with the Rural Credit Union of Xushui County for an amount that is $4,165,149 as of June 30, 2012 and $4,140,233 as of December 31, 2011. The loan is secured by its manufacturing equipment of $10,009,274 and $10,646,244 as of June 30, 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. As of June 30, 2012, the entire balance of the loan in the amount of $4,165,149 has been presented as current portion of loan-term loan from credit union in the consolidated balance sheet. Total interest expenses for the short-term and long-term loans for the three months ended June 30, 2012 and 2011 were $186,959 and $73,504, respectively. Total interest expenses for the short-term and long-term loans for the six months ended June 30, 2012 and 2011 were $357,973 and $141,190, respectively.

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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 Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 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 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. + Details
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