Introduction
Credit line refers to a flexible, convenient and recyclable product provided by Bank of China to the customers. Bank of China may quickly extend the short-term credit to customers regardless of its accumulated amount and frequency, as long as the balance of credit extension is not over the standard of corresponding service.
With flexible arrangement, total credit line can be further divided into limits for different products such as loan, L/C, export bill purchase, letter of guarantee, bank acceptance draft, acceptance draft discounting. Credit line is applicable in all credit extension services with a term within one year (inclusive), which can be extended to over one year for letter of guarantee of tender, performance, advance payment, customs and marine under the item of letter of guarantee.
Features
1. Provide convenience to enterprises' short-term financial arrangement. Since credit line can be recycled, financial plan of enterprises may become more definite and systematic. Enterprises needn't arrange funds for current operations under the credit line.
2. Meet demand of enterprises for general financing. Credit line includes varieties of limits for different products such as loan, L/C, letter of guarantee and other credit extension services, which covers key financing demands of customers. With approval of Bank of China, such limit can complement and overlap each other, increasing its utilization.
3. Simplify approval formalities of credit extension of enterprises. After acquiring credit line, the customers are entitled to decide how to use it and when to use it at their own discretion and do not apply the credit extension bank for approval item by item according to the provisions of the contract. Thus customers shall not go through the procedures of single credit extension approval, such as business information survey, guarantee conform and other formalities as required.
4. Differences between credit line and existing credit extension products.
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Credit Line |
Single Credit Extension Product |
| Scope of Service |
Varieties of credit extension products portfolio can provide customers with comprehensive financing convenience. |
Focusing on one aspect financing demand of customers, it can only provide single financing service. |
| Enforcement of Rights |
Customers enjoy substantial discretion in choosing single or multiple credit extension products and convenient procedures. |
Single credit extension with very complicated procedures requires examination of customers' qualification. |
| Credit Line Adjustment |
Customers can adjust the credit line of different products, increasing its efficiency. |
It is matched with one related service with much constraint. |
Term
Short-term credit extension services include loaning, issuing of L/C, letter of guarantee, and bill purchase with a term within one year (inclusive), which can be extended to over one year for letter of guarantee of tender, performance, advance payment, customs and marine.
Guarantee
The mode of credit line includes loan on credit or guarantee which shall have the maximum guarantee or mortgage, to cover all risks under credit extension.
Interest Rate
Interest rates of credit line are different in accordance with different products.
Charges
Charges for intermediary service to customers.
Target Customers
Customers with independent legal person who are credit extension targets of Bank of China can apply for appropriate credit line according to relevant regulations.
Application Qualifications
1. The customers must meet basic terms and requirements of General Provisions of Loans and credit extension management policies of Bank of China on borrowers.
2. The customers shall be large and medium manufacturing enterprises, import and export enterprises, commercial enterprises or joint ventures with sound operation and finance as well as strong competition in respective industries, which have very promising future for development;
3. The customers have stable partnerships with Bank of China and good historical performances;
4. Customers' business operation is in line with operation of related credit line and can be fully and effectively monitored by Bank of China;
5. Customers' guarantee method meets requirements of Bank of China.
Required Documents
1. Business license of enterprises;
2. Loan cards;
3. Financial statements of enterprises and other material required by Bank of China.
Process
1. Initial stage of credit line
Sales account manager of the corporate business department allows credit line application by customers and conduct business information survey. At the stage, the corporate business department will go through the following procedures:
(1) Qualification examination for customers according to their rating and admission criteria of our bank.
(2) Collection of essential materials and information of customers, including request for credit line approval, yearly examined business license, loan cards and financial statements in last three years.
(3) Collection of guarantor's business license and financial statements in last three years, the list of the mortgage (pledge) and its valuation documents, title certificate, the reviewing report on mortgage (pledge) by the approval authority.
(4) Draft of credit line agreement. In the event that the borrower (or guarantor, mortgagor or pledgor) is a foreign enterprise or joint-equity enterprise, it shall submit the board of directors' resolution containing relevant contents (signatures of minimum members of board of directors) as well as power of attorney.
(5) Compilation of credit line approval report.
2. Implementation stage of the credit line agreement
Credit line comes to implementation stage after credit line approval report has been approved by risk management department or gone through relevant procedures.
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