Hotline : 

Current Position : Home > Brussels Branch > Corporate Banking > Trade Finance Services > Trade Finance
Online Banking

Export Commercial Invoice Discounting

Name

Export Commercial Invoice Discounting

Introduction

Exporter (seller) transfers the receivable under a current or future sales contract with importer (buyer) to Bank of China, which provides the exporter with trade financing, receivable collection, and maintenance of sales ledger and other services. Commercial invoice discounting can be divided into disclosed and undisclosed export commercial invoice discounting depending on whether the debtor is advised.

Features

1. Acceleration of capital turnover. The exporter (seller) can obtain financed money before importer makes payment, therefore speeding up the capital turnover.

2. Simplification of financing process. Financing procedures are more convenient compared with those for working capital loans.

3. Elimination of exchange rate risk. Exporter (seller) can obtain the fund by discounting service, avoiding risk deriving from adverse change in forward exchange rate.

4. Right of recourse for the financing of exporter (seller). If the exporter fails to make payment on schedule, Bank of China (Luxembourg)S.A Brussels Branch can exercise the right of recourse against exporter (seller).

Charges

The interest rate for financing will be determined by Bank of China (Luxembourg)S.A Brussels Branch based on Bank of China's rules on trade financing interest rate and charges and negotiation with the customer.

Target Customers

1. Exporters (seller) who encounter difficulty in capital turnover when selling on credit;

2. Exporters (sellers) who face exchange rate risk;

3. Exporters (seller) who discover new investment opportunities with higher expected yield than discount rate between goods delivery and receipt of payment.

Application Qualifications

1. The applicant shall have a corporate account at Bank of China (Luxembourg)S.A Brussels Branch;

2. The applicant shall have credit line at Bank of China (Luxembourg)S.A Brussels Branch.

Procedure

1. At the request of the exporter (seller), the Branch grants discounting limit in accordance with credit extension rules and sign "Commercial Invoice Discounting Agreement";

2. The exporter (seller) sends out the goods and issues documents, and submits discounting application to Bank of China (Luxembourg)S.A Brussels Branch;

3. Bank of China Brussels Branch handles the discounting for exporter (seller) after checking the documents and trading background;

4. If the importer (buyer) fails to make payment on schedule, Bank of China (Luxembourg)S.A Brussels Branch will prompt for collection on its own or via exporter (seller), and exercise the right of recourse against exporter (seller);

5. If the importer (buyer) makes payment on schedule, Bank of China (Luxembourg)S.A Brussels Branch will repay the principle and interest of the discounted amount with the payment, and transfer the balance to exporter (seller).

Related Information