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Forfaiting
2017-10-26
(I) Product function
The clients apply to us to buy an undue creditor’s rights arising from a transaction in goods, services, or assets that normally have been accepted or obligated by a financial institution without the right of recourse. Our bank hereby issues financing to the clients.
(II) Business characteristics
1. No right of recourse for the buyout. The Bank has no right of recourse for the buyout of receivables, which makes the clients’ receivable “safe in the pocket”;
2. Avoid risks. The clients transfer the country risk, Buyer’s credit risk, exchange rate risk, interest rate risk, etc. to the bank, so as to avoid risks.
3. There is no need to occupy the clients’ limit of credit extension. The clients can obtain financing from our Bank even if there is no limit of credit extension or the limit of credit extension is insufficient;
4. Optimize financial statements. The clients can reduce receivables and improve cash flow to realize the purpose of optimizing financial statements without increasing bank liabilities.
5. Obtain export tax refunds in advance. The clients can obtain export write-offs and tax refunds in advance, so as to save financial costs.
(III) Applicable objects
1. Clients with tight working capital and need to accelerate the speed of turnover of receivables;
2. Clients who wish to avoid the credit risk, country risk, interest rate risk and exchange rate risk faced by the forward collection;
3. Clients with an insufficient limit of credit extension but who wish to obtain trade financing;
4. Clients s who need to obtain export tax refunds and write-offs in advance to optimize financial statements.
(IV) Business process
1. In case the qualified exporters or selling banks have the intention to carry out Forfeiting business, they shall provide the relevant materials to our Bank and sign the Forfaiting business agreement;
2. Our Bank reviews the relevant materials and documents.
3. After confirming the quotation with the clients, our Bank will transfer the claims payment;
4. After receiving and reviewing the acceptance telegraph text and other documents, our Bank will pay the financing payment to the enterprise clients or the selling banks.
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