TRADE FINANCE

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.

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.

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.

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.

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.

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.

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.