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Product Name
Outward Bill
Product Description
Short-Term finance supplied by Bank of China with the export bill as the security as required by the exporter after delivery of goods and provision of the documents requested by the letter of credit or the contract.
Product Functions
To meet the exporter's need of short-term financing under the L/C or collection. The products are classified into non-discrepancy export bill purchase under the L/C, discrepancy export bill purchase under the L/C, D/P collection export bill purchase and D/A collection export bill purchase.
Product Features
1. Acceleration of capital turnover. The exporter can be paid in advance before receiving payment from importer, so that capital turnover can be speeded up.
2. Simplification of financing procedures. Financing procedures are simpler than those of working capital loan.
3. Improvement of cash flow. The financial condition is improved by increasing current cash flow.
4. Less financial expenses. The customer can choose the funding currency in accordance to the interest rates of different currencies in Bank of China, so as to minimize the financial expenses.
5. Lowering of the credit extension threshold. For the documents in conformity with the L/C, the exporter can still apply for export bill purchase even without credit line in the bank.
Eligible Applicants
1. Exporters who have limited working capital and have to develop business by rapid capital turnover;
2. Exporters who encounter the temporary difficulty in capital turnover during the period between goods delivery and receipt of payment;
3. Exporters discover new investment opportunities between goods delivery and receipt of payment, and the expected yield is higher than interest rate of export bill purchase.
Application Requirements
I. Basic Qualifications
1. The business license of enterprises legally approved, registered and annually checked and other valid certifications sufficient to prove the legitimacy and scope of its operation;
2.The real trade background.
II. For discrepancy export bill purchase under L/C and D/P collection export bill purchase, exporters should have credit line from Bank of China. If Bank of China cannot control the title of goods, the credit rating of customers should be CC level or above; the customer is not subject to credit rating if Bank of China can control the title of goods. For export bill purchase with non-discrepancy documents under the L/C, the acceptance requirements will be the same as those of the discrepancy ones if the occupation of credit line of financial institutions is not allowed; the exporter is not restricted by the credit rating and other acceptance requirements if the occupation of credit line of financial institutions is allowed.
III. For D/A collection export bill purchase, the exporter should have a credit line in Bank of China and the customer credit rating should be CCC level or above.
Application Procedures
1. The exporter enters into financing agreement with Bank of China.
2. The exporter submits export bills purchase application to Bank of China.
3. Upon approval of the documents, Bank of China effects the payment to the exporter's account.
4. Bank of China mails the documents to the foreign bank (the issuing bank or a designated bank under the L/C, or the collecting bank under collection) for reimbursement.
5. Upon receipt of documents, the foreign bank notifies the applicant under the L/C, or the payer under collection.
6. Foreign bank effects payment at maturity, Bank of China recognizes it as export bill purchase.
Gentle Reminder
1.To submit a formal application for export bill purchase to the bank (usually the advising bank or the negotiating bank);
2. Applicant under the L/C should be the beneficiary of the L/C;
3. While applying for export bill purchase under the L/C, you should try to submit export documents which are in compliance with the terms of the letter of credit;
4. If you wish to get finance through export bill purchase, try to avoid the following:
a. The non-negotiable transport document;
b. Failure to submit a full set of negotiable bill of lading;
c. Transferable L/C;
d. L/C with soft clauses;
e. Submitting documents with essential discrepancies.
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