BOC U.S.A. provides clients with the ability to manage their working capital more efficiently and reduce receivable cycles, while simultaneously mitigating certain market-related risks.
Risk participation is an important product to strengthen cooperation among financial institutions. As a participant, BOC U.S.A. bears part or all of the credit risks of the obligor under international settlement and trade finance, on a funded or unfunded basis. Funded risk participation/forfaiting means that BOC U.S.A. funds the deal in risk participation. Whereas unfunded risk participation means that BOC U.S.A. does not provide funding, however if the obligor fails to fulfill payment obligations at maturity, the bank will make corresponding payments in accordance with its pro-rata share.
- Optimizes asset portfolio management
- Improves risk coverage capacity
Based on the buying parties’ confirmation on the receivables, we provide our clients with short-term liquidity to the supply chain to help suppliers get paid earlier with a lower interest rate, compared with a loan to suppliers.
- Helps suppliers get paid faster and mitigate any disruption to the supply chain.
- Provides short-term liquidity to the supplier with lower cost.
BOC U.S.A. purchases Accounts Receivables on a non-recourse basis, undertaking the credit risk of the buyer in the underlying transaction, and paying the purchase price to the corporate selling parties. A credit insurance policy, issued by a credit insurance agency and approved by BOC U.S.A., could be accepted as an applicable risk mitigation.
- Accelerate the turnover of the receivables, and optimize cash flow from operating activities.
- Provide short-term liquidity to the supplier through purchase of receivables instead of loan arrangement.
Two-Factor Import Factoring is when BOC U.S.A. (the Import Factor), working with Export Factor, approves a credit limit for a buyer in the U.S., and provides services including collection of accounts receivable, business information survey and protection against bad debt for sellers.
- BOC U.S.A. undertakes the buyer’s credit risk, working with the Export Factor to facilitate the cross-border cooperation between sellers and buyers.
Two-Factor Export Factoring is an arrangement whereby a seller assigns their existing or future accounts receivable to BOC U.S.A. (the Export Factor), and then to the Import Factor usually located in the country of the buyers. Export Factoring contains comprehensive scope of services containing finance, receivables ledger management by Bank of China, as well as services including collection of receivables, credit risk undertaking, and protection against bad debts by the Import Factor through the Two-Factor arrangement.
- Provides short term liquidity and faster payment to the supplier through factoring on the receivables arising from cross-border transactions.
- Undertakes the credit risk of buyer to facilitate business cooperation especially with new buyers located in other countries.
- Comprehensive services to assist sellers optimize management on cross-border transactions.
BOC U.S.A. provides a broad range of trade related cross-border RMB products and tailor-made RMB solutions, leveraging our integrated platform. Our trade related services include RMB-denominated Letter of Credit (L/C), Import/Export Bill Purchases, Standby Letter of Credit, L/C Discount, Forfaiting, Risk Participation, Supply Chain Financing and Factoring, and other related products.
L/C Discounting is a receivable discounting provided by the bank to the exporter under the L/C. The bank purchases the documents or bills of the exporter after the bank receives the acceptance from the L/C issuing bank or checks the documents and no discrepancy is found in the documents.
- The exporter gets paid in advance before receiving payment from the importer, accelerating the turnover of the receivables and optimizing cash flow.
- The customer can choose the funding currency in accordance with the interest rates of different currencies offered by Bank of China U.S.A., to minimize financial expenses.
A Trust Receipt Loan is a short-term financing solution for importers. Customers who maintain a loan facility with the bank can utilize the loan facility to book a Trust Receipt Loan to pay documents under both Import L/C and Inward Documentary Collections. The original signed Trust Receipt must be presented for each loan to be approved.
- A solution to obtain short-term finance from the bank to facilitate business by improving working capital.
- An importer can obtain control of the goods in time, shortening the overall processing time, helping to facilitate business needs.
- Helps to meet the importer's short-term financing requirements.