An effective financing method taken in the case of the arrival of cargo prior to the documents
WHAT——What is shipping guarantee?
•Shipping guarantee is a written guarantee signed by the bank and issued to the importer for picking up the goods from the shipping company in the case of arrival of cargo prior to the shipping documents.
•Such a kind of trade finance is especially applicable in the case of short shipping voyage and arrival of cargo prior to the documents.
WHY——Why choose shipping guarantee?
•Grasp the market opportunity – In the case of arrival of cargo prior to the bill of lading, the importer could pick up the goods in advance only with the shipping guarantee signed and issued by the bank, and the market opportunity is grasped as a result.
•Reduce the capital occupied – By shipping guarantee, the importer could pick up the goods, declare to the custom, sell and get the sales income before making payment. No self-owned capital is involved in the whole process and the working capital tension is relieved.
•Improve the cash flow – In the shipping guarantee business, the direction of cash flow is “inflow first and outflow next”, through which the net cash inflow of the importer is increased and its liquidity improved.
WHEN—When to use the shipping guarantee?
•The goods is arrived ahead of the bill of lading, and the market of imported goods is booming.
HOW——How to handle the shipping guarantee business?
•The Operation flow
1.Basic prerequisites for issuing a shipping guarantee include : a. Settlement is done by .letter of credit b. Transportation is done by ocean; c. The letter of credit requires submitting the whole set of shipping documents;
2.Apply for shipping guarantee to the issuing bank;
3.The importer is required to maintain credit line or have single credit extension approved by the shipping guarantee issuance bank.
4.When applying for shipping guarantee, the importer is required to submit: a. The application for shipping guarantee; b. Letter of shipping guarantee; c. Duplication of invoice; d. Duplication of bill of lading;
5.The importer is required to pledge to the bank issuing the shipping guarantee that the documents would not be rejected no matter whether or not there are discrepancies.
6.When the original Bill of Lading arrives, the importer is required to substitute the Shipping Guarantee with bill of lading at the shipping company and return the shipping guarantee back to the issuing bank for cancellation.
ADVANTAGES——Advantages of Bank of China
•Predominant credit ——Bank of China has a long history of over 90 years and has been awarded “the Best Bank in China” by “Euromoney” for successively 8 times. With the progressively improved system of corporate governance, overall integration of operation flow, wholly-upgraded service efficiency and rich financial products, BANK OF CHINA (HUNGARY) CLOSE LTD. has continued to advance toward its goal of becoming a leading universal international bank;
•Vigorous strategy —— All-out exertion to extend the strategy of developing intermediate businesses and trade financing products.
•Accreditation support —— Bank of China, the first bank among domestic commercial banks to implement the centralized credit management, has designed diversified and effective credit process to support financing businesses;