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Seller Bill Advance under Domestic L/C


 

Introduction

Seller bill advance under domestic L/C means that Bank of China provides the seller with short-term financing against documents complying with the L/C after the delivery of goods. Source of bill advance repayment in conformity with the L/C comes from receipt of payment for goods under L/C. If the issuing bank does not perform the responsibility of payment; Bank of China has the right of recourse against the seller.

Features

1. Acceleration of the capital turnover: The seller can be paid in advance before the buyer pays for the goods, thus speeding up the capital turnover;
2. Simplification of the financing procedures: The financing procedures are simpler than those of working capital loans;

3. Improvement of the cash flow: The current cash flow increases so as to improve the financial position.

Interest Rate

The interest rate of the seller bill advance should be applied in the same way as the interest rate of RMB working capital loan at the same level.

Target Customers

1. Sellers who have limited working capital and have to conduct business with quick capital turnover;

2. Sellers encounter the temporary difficulty in capital turnover during the period between goods delivery and payment receipt;

3. Sellers get a new investment opportunity during the period between goods delivery and payment receipt, and the expected rate of return is higher than the bill advance interest rate.

Application Qualifications

1. Customers have the corporate business license which legally approved, registered, and annually checked and other valid certifications sufficient to prove the legitimacy and scope of its operation;

2. Customers have the loan card;

3. Customers have the account opening permit and have opened the settlement account with Bank of China.

Process

1. The seller enters into a financing agreement with Bank of China, and submits the Application for Seller Bill Advance under Domestic L/C or Application Contract for Seller Bill Advance under Domestic L/C to Bank of China;

2. Bill advance payment is credited to the seller's account after Bank of China's approval of the documents;

3. Bank of China forwards the documents to the issuing bank for reimbursement;

4. The issuing bank informs the L/C applicant under L/C upon receipt of the documents;

5. At maturity, the issuing bank reimburses Bank of China for bill advance payment.

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