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Loans Payable
 9 Months Ended
Sep. 30, 2023
Loans Payable [Abstract]  
Loans Payable

(7) Loans Payable

 

Short-term bank loans

 

   September 30,   December 31, 
   2023   2022 
Industrial and Commercial Bank of China (“ICBC”) Loan 1  $-   $5,023,978 
ICBC Loan 2   -    287,167 
ICBC Loan 3   -    143,583 
ICBC Loan 4   417,839    - 
China Construction Bank Loan   -    143,583 
ICBC Loan 5   417,839    - 
Total short-term bank loans  $835,678   $5,598,311 

 

On November 10, 2022, the Company entered into a working capital loan agreement with the ICBC. The loan was secured by the land use right of Dongfang Paper as collateral for the benefit of the bank and guaranteed by Mr. Liu. The loan bore a fixed interest rate of 4.785% per annum. The Company repaid $71,743 in May 2023 and paid off the remaining balance of the loan in August 2023. The balance of the loan was $nil and $5,023,978 as of September 30, 2023 and December 31, 2022, respectively.

 

On November 30, 2022, the Company entered into a working capital loan agreement with the ICBC, with a balance of $nil and $287,167 as of September 30, 2023 and December 31, 2022, respectively. The loan bore an interest rate of 4.25% per annum. The loan was fully repaid in May 2023.

 

On November 30, 2022, the Company entered into a working capital loan agreement with the ICBC, with a balance of $nil and $143,583 as of September 30, 2023 and December 31, 2022, respectively. The loan bore an interest rate of 4.25% per annum. The loan was fully repaid in May 2023.

 

On May 29, 2023, the Company entered into a working capital loan agreement with the ICBC, with a balance of $417,839 as of September 30, 2023. The loan bears a fixed interest rate of 4.25% per annum. The loan will be due by November 25, 2023.

 

On July 29, 2022, the Company entered into a working capital loan agreement with the China Construction Bank, with a balance of $nil and $143,583 as of September 30, 2023 and December 31, 2022, respectively. The loan bore a fixed interest rate of 3.95% per annum. The loan was fully repaid in July 2023.

 

On June 29, 2023, the Company entered into a working capital loan agreement with the ICBC, with a balance of $417,839 as of September 30, 2023. The loan bears a fixed interest rate of 3.55% per annum. The loan will be due by June 28, 2024.

 

As of September 30, 2023, there were guaranteed short-term borrowings of $nil and unsecured bank loans of $968,751. As of December 31, 2022, there were guaranteed short-term borrowings of $5,023,978 and unsecured bank loans of $574,333.

 

The average short-term borrowing rates for the three months ended September 30, 2023 and 2022 were approximately 4.52% and 4.28%. The average short-term borrowing rates for the nine months ended September 30, 2023 and 2022 were approximately 4.66% and 4.6%.

 

Long-term loans

 

As of September 30, 2023 and December 31, 2022, long-term loans were $11,270,053 and $9,040,002, respectively.

 

   September 30,   December 31, 
   2023   2022 
Rural Credit Union of Xushui District Loan 1  $1,197,805   $1,234,816 
Rural Credit Union of Xushui District Loan 2   3,481,536    3,589,582 
Rural Credit Union of Xushui District Loan 3   2,228,474    2,297,332 
Rural Credit Union of Xushui District Loan 4   1,810,635    1,866,582 
Rural Credit Union of Xushui District Loan 5   2,507,034    - 
Yujiangna   44,569    51,690 
Total   11,270,053    9,040,002 
Less: Current portion of long-term loans   (4,707,652)   (4,835,884)
Long-term loans  $6,562,401   $4,204,118 

  

As of September 30, 2023, the Company’s long-term debt repayments for the next coming years were as follows:

 

Fiscal year  Amount 
Remainder of 2023  $4,707,652 
2024   3,061,367 
2025 & after   3,501,034 
Total   11,270,053 

 

On April 16, 2014, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 5 years, which was originally due in various installments from June 21, 2014 to November 18, 2018. The loan is guaranteed by an independent third party. Interest payment is due quarterly and bore a rate of 7.68% per annum. Effective from November 15, 2022, the interest rate was reduced to 7% per annum. On November 6, 2018, the loan was renewed for additional 5 years and will be due and payable in various installments from December 21, 2018 to November 5, 2023. As of September 30, 2023 and December 31, 2022, total outstanding loan balance was $1,197,805 and $1,234,816, respectively, which are presented as current liabilities in the consolidated balance sheet.

 

On July 15, 2013, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 5 years, which was originally due and payable in various installments from December 21, 2013 to July 26, 2018. On June 21, 2018, the loan was extended for additional 5 years and was due and payable in various installments from December 21, 2018 to June 20, 2023. On June 19, 2023, the loan was extended for another 5 years and will be due and payable on June 20, 2028. The loan is secured by certain of the Company’s manufacturing equipment with net book value of $29,713 and $280,466 as of September 30, 2023 and December 31, 2022, respectively. Interest payment is due quarterly and bore a rate of 7.68% per annum. Effective from November 15, 2022, the interest rate was reduced to 7% per annum. As of September 30, 2023 and December 31, 2022, the total outstanding loan balance was $3,481,536 and $3,589,582, which are presented as non-current liabilities and current liabilities in the consolidated balance sheet as of September 30, 2023 and December 31, 2022, respectively.

 

On April 17, 2019, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which was due and payable in various installments from August 21, 2019 to April 16, 2021. The loan was renewed on March 22, 2021 and December 24, 2021 and extended for additional 3 years in total, which will be due on April 16, 2024 according to the new schedule. The loan is secured by Tengsheng Paper with its land use right as collateral for the benefit of the credit union. Interest payment is due quarterly and bore a rate of 7.68% per annum. Effective from November 15, 2022, the interest rate was reduced to 7% per annum. As of September 30, 2023 and December 31, 2022, the total outstanding loan balance was $2,228,474 and $2,297,332, respectively, which are presented as current liabilities and non-current liabilities in the consolidated balance sheet as of September 30, 2023 and December 31, 2022, respectively.

 

On December 12, 2019, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which is due and payable in various installments from June 21, 2020 to December 11, 2021. The loan was renewed on March 22, 2021 and December 24, 2021 and extended for additional 3 years in total, which will be due on December 11, 2024 according to the new schedule. The loan is secured by Tengsheng Paper with its land use right as collateral for the benefit of the credit union. Interest payment is due monthly and bore a rate of 7.56% per annum. Effective from November 15, 2022, the interest rate was reduced to 7% per annum. As of September 30, 2023 and December 31, 2022, the total outstanding loan balance was $1,810,635 and $1,866,582, respectively, which are presented as non-current liabilities in the consolidated balance sheet as of September 30, 2023 and December 31, 2022, respectively.

 

On February 26, 2023, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which is due and payable in various installments from August 21, 2023 to February 24, 2025. The loan is secured by Dongfang Paper with its land use right as collateral for the benefit of the credit union. Interest payment is due monthly and bore a rate of 7% per annum. As of September 30, 2023, the total outstanding loan balance was $2,507,034. Out of the total outstanding loan balance, current portion amounted was $1,267,445, which is presented as current liabilities in the consolidated balance sheet and the remaining balance of $1,239,589 is presented as non-current liabilities in the consolidated balance sheet as of September 30, 2023.

 

On July 1, 2022, the Company entered into a loan agreement with Jiangna Yu, a customer of the Company, pursuant to which the Company borrowed RMB 400,000 from Jiangna Yu for a term of five years. The loan is payable in monthly installment of RMB10,667 from July 2022 to July 2027. As of September 30, 2023 and December 31, 2022, the total outstanding loan balance was $44,569 and $51,690, respectively. Out of the total outstanding loan balance, current portion amounted $11,072 and $13,928, respectively, which are presented as current liabilities and the remaining balance of $30,641 and $40,204 are presented as non-current liabilities in the consolidated balance sheet as of September 30, 2023 and December 31, 2022, respectively.

 

Total interest expenses for the short-term bank loans and long-term loans for the three months ended September 30, 2023 and 2022 were $247,628 and $248,239, respectively. Total interest expenses for the short-term bank loans and long-term loans for the nine months ended September 30, 2023 and 2022 were $760,807 and $753,789, respectively.