Overview
The Export Bill Purchase is a kind of short-term financing where customers sell the full set of export documents to ABC which will in turn pay customers the face value minus the interest as well as any charges incurred during the date of purchase to the predicted date of receiving payment. The Export Bills Purchase can be L/C, export collection D/P, and export collection D/A.
Functions
1. Customers can get money before the importer makes payment, gaining faster turnover of funds.
2. Export Bill Purchase helps increasing cash inflows of the current period, and improving customers' financial standing and financing capability.
3. Customers are able to choose the currency of financing based on the respective interest rates, minimizing financial cost.
4. Customers are able to sell foreign exchange earlier to mitigate the risk of foreign exchange rate.
Procedures
1. The Export Bill Purchase under L/C
• The customer completes the Application for Export Bill Purchase and submits the original L/C issued by a foreign bank, the full set of export documents, export contract executed with the foreign importer, permit/license for export (if required) and other documents required by ABC.
• ABC reviews the application and signs the Contract for Export Bill Purchasebefore releasing the proceeds.
• ABC sends the documents to the importer for collection of payment.
• The payment in foreign exchange received from the importer will be directly used to repay the credits under the Export Bill Purchase.
2. Bill purchase under collection
• The customer completes the Application for Export Bill Purchase and submits the full set of export documents, export contract executed with the foreign importer, permit/license for export (if required) and other documents required by ABC.
• ABC reviews the application and signs the Contract for Export Bill Purchase before releasing the proceeds.
• ABC makes documentary collection from the remitting bank.
• The payment in foreign exchange received from the importer will be directly used to repay the credits under the Export Bill Purchase.
Tips
1. The customer shall be the beneficiary of the L/C or the payee of the collection bill.
2. The goods for export shall be well received goods without sharp price fluctuation.
3. If ABC has granted package loans to the customer, such loans should be first repaid before application.
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