Introduction
Domestic commercial invoice discounting means an agreement whereby the seller assigns his existing or future accounts receivable to Bank of China for the purpose of financing and functions like collection of accounts receivable and sales administration.
Features
1. Acceleration of capital turnover: the seller obtains financing payment in advance, thereby speeding up capital turnover rate.
2. Simplification of financing procedures: simpler procedures than those of working capital loans.
3. Bank of China has the right of recourse against the seller's financing. Once the buyer fails to make payment in time, Bank of China can exercise the right of recourse against the seller.
Target Customers
1. In principle, it is applicable to domestic goods or service trade that uses open account (O/A) as the payment method and meanwhile the payment terms do not exceed 180 days;
2. The seller who faces the problem that account receivables occupies the working capital in the domestic trade.
Application Qualifications
1. Customers who have legal business approval and registration with annually-checked business license or other valid certificates that can prove the operation legitimacy and business scope;
2. Customers who have the loan card;
3. Customers who have the account opening permit and a settlement account with Bank of China;
4. Customers who have a credit line granted by Bank of China.
Interest Rate
In principle, the same level of related RMB loan interest rate applies.
Charges
Handling fee
Process
1. Upon receipt of the seller's application, Bank of China checks and sets the discount limit according to relevant credit requirements, and signs the Agreement on Domestic Commercial Invoice Discounting;
2. The seller delivers goods, issues documents and submits the discount application to Bank of China;
3. After examining the authenticity of documents and trade, Bank of China makes discount payments to the seller;
4. If the buyer fails to pay on the due day, Bank of China itself may collect the payments or entrust the seller to collect the payments from the buyer. If the payments are overdue for more than 30 days, Bank of China will take back discount payments from the seller and charge overdue interest accordingly;
5. If the buyer pays on the due day, Bank of China will use the payment to cover the discount principal and interest, and return the balance to the seller.
|
