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  Bank of China >> BOC UK >> Corporate Banking >> Trade Services >> Trade Finance

Two-factor Import Factoring


 

Product Name

Two-factor Import Factoring

Product Description

Two-Factor Import Factoring means that, as applied by a foreign Export Factor (excluding Bank of China's overseas branches or subsidiaries who are not Factors Chain International members), Bank of China (the Import Factor) approves credit limit for a specific buyer in China, thus providing such services as collection of accounts receivable, business information survey and protection against bad debts for the seller.

Product Category

According to whether the buyer is notified of Account Receivable assignment, both of undisclosed Two-Factor import factoring and disclosed Two-Factor import factoring are provided.

Product Features

1. Make full use of favorable terms of payment to increase sales turnover. Bank of China will assume the credit risks of the buyer, which makes it easier for the seller to accept O/A terms. The buyer can fully enjoy the benefits of sales on credit terms and buy more goods with limited capital, thus accelerating flow of capital and increasing sales revenue.

2. Less costs and simple procedures. The factoring cost is generally borne by the seller, and the buyer obviates the tedious procedures of opening L/C and preparing documents with streamlined purchasing procedures; meanwhile, the factor provides account management and accounts receivable collection services so as to lighten the burden on the buyer's business and save management costs.

3. Prevention of the seller's default risk. The buyer makes payment after goods inspection to effectively avoid the risks of the seller's fraud and default under the L/C.

4. Bank of China generally provides no finance in Two-Factor import factoring service.

Eligible Applicants

Buyers who are unwilling to provide credit support like L/C to sellers but wish to buy goods on credit.

Application Requirements

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 buyers have the credit line in Bank of China.

Application Procedures

1. As applied by Export Factor/seller, Bank of China evaluates the buyer's preliminary credit, approves a credit line and informs the Export Factor of the approval;

2. Bank of China signs with the buyer the Import Factoring Agreement and approves the Export Factor's request for credit line on the buyer;

3. In accordance with regulations of Bank of China, the seller issues the Introductory Letter to the buyer, and assigns accounts receivable to the Export Factor who further assigns the accounts receivable to Bank of China after the delivery of goods;

4. Bank of China collects the accounts receivable on a regular basis;

5. The buyer pays at maturity to Bank of China and Bank of China transfers the funds to the Export Factor;

6. If the buyer fails to pay an undisputed invoice in full within 90 days of its due date, Bank of China will make payment under guarantee to the Export Factor.

Gentle Reminder

If the buyer raises a dispute, the payment under guarantee will be suspended until the dispute is resolved. Bank of China will help the seller in settling disputes, and take appropriate measures according to processing results.

Our Advantages

Our advantage is that Bank of China boasts the largest market share in the Two-Factor import factoring in China.

Bank of China renders top-ranking Two-Factor import factoring service to customers by virtue of sound cooperation with foreign factors, leading expertise and flexible credit mechanism.

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