Packing bill financing

Product descriptions

At the request of the beneficiary (exporter) of the L/C, the Bank shall add the commitments of discount to the commercial acceptance bill issued by the exporter to the domestic supplier (if the beneficiary starts to handle business with the Bank), or issue the bank acceptance bill directly to the supplier (if the Bank is satisfied with the credit status of the beneficiary). When the supplier present the bill to the Bank for discount or payment, the Bank shall do so.

Product functions

1. The product is used to meet the short-term financing requirements of the exporter for goods preparation and shipment under L/C.

2. The primary source of repayment is collection of export proceeds under L/C.

3. The bill financing based on bank credit can reduce the complexity and risk of cash transaction between the exporter and supplier.

Product features

1. Expand trade opportunities. When the exporter is short of funds and unable to obtain the payment terms of advance payment, the product helps the exporter carry out business smoothly and grasp the trade opportunities.

2. Reduce capital occupation. It will not occupy exporter’s self funds during the goods preparation stages such as production and, which can relieve the pressure as a result of limited working capital.

3. Reduce the risk of cash transaction.

4. The commercial credit between the exporter and the supplier is converted into bank credit through bank factoring discount (under the factoring discount method of the commercial acceptance bill bank)/bank commitment payment (under bank acceptance bill method), and the supplier obtains discount commitment from the bank.

5. It is more accessible compared with the loan procedures.

Interest rate

The financing interest rate shall be executed according to the interest rate authorized by the Bank for trade financing business.

Applicable customers

1. The exporter is short of working capital, while the foreign importer refuses to advance payment, but agree to open an L/C.

2. The exporter and the supplier maintain stable relations for a long time, located in different regions, and have been adopting the cash transaction or bank transfer in the trading.

Application conditions

1. The applicant has been approved and registered in accordance with the law, and has an annually legal person business license or other valid documents which can prove its business legitimacy and business scope;

2. The applicant has a loan card;

3. The applicant has an account opening license, and has opened a settlement account with the Bank;

4. The applicant is qualified for import and export operations;

5. The applicant has relevant credit line in the Bank.

Submittals

1. Written application;

2. Import and export sales contract and domestic purchase contract;

3. Introduction to trade conditions;

4. Original L/C.

Handling process

1. The exporter signs a financing agreement with the Bank, and submits a packing bill financing application, trade contract, original L/C (including all amendments) and relevant materials to the Bank.

2. The exporter deposits the margin required by the credit conditions (if necessary).

3. After examination and approval by the bank, the exporter issues the commercial acceptance bill with the supplier as the payee, or the bank issues the bank acceptance bill.

4. The exporter presents the commercial draft/bank acceptance bill to the supplier, and the supplier may present the bill to the Bank for discount / payment.

5. The exporter will, after completing the purchase, production and shipment, submit the documents consistent with the L/C to the Bank.

6. The Bank will send the documents to a foreign bank (issuing bank/confirming bank) for reimbursement.

7. The foreign bank pays the Bank by the due date, and the Bank will then use the money to repay the amount discounted/paid to the supplier under the packing bill financing.

Reminders

1. The exporter shall sign a formal Packing Bill Financing Contract with the Bank;

2. The financing bank shall be the designated bank in the L/C;

3. The L/C should not contain the "soft clause" that the exporter cannot perform;

4. The original L/C (including all amendments) shall be kept in the financing bank after the application for packing bill financing is proposed;

5. Under normal circumstances, the remittance received under the L/C must be the primary repayment source of the packing financing bill;

6. After shipping the goods and obtaining the documents under the L/C, the exporter shall present the documents to the financing bank in time.