◆ Trade finance methods provided to importers

(1) Provide L/C financing line.

In order to make it easier for importers to obtain financing, banks will provide certain credit lines or issuance lines for customers with good reputation, frequent business dealings and certain solvency, so that customers can recycle. When issuing a letter of credit, the importer only needs to pay a certain margin in accordance with the proportion, and does not need to pay the full amount, and the difference in the middle can be offset by the credit line, so as to reduce the capital occupation and improve the operational efficiency.

(2) Guarantee delivery.

If the distance between the import and export enterprises is relatively close and the goods arrive before the documents, in order to avoid paying demurrage charges and speed up the capital turnover, the issuing bank can first pick up the goods from the shipping company with the delivery guarantee and promise to compensate the shipping company for its losses. After the documents arrive, the original bill of lading will be exchanged for the delivery guarantee and cancelled. In this way, importers can not only reduce unnecessary and necessary expenses, but also avoid losses caused by late delivery and material changes. After the documents arrive, the bank must pay as agreed, regardless of whether the documents do not match the letter of credit.

(3) Import bills.

According to the L/C at sight, the issuing bank reviews the import documents after receiving them, and if the documents are consistent with the provisions of the L/C, or if the documents are inconsistent with the L/C, but both the importer and the issuing bank agree that according to the requirements of the importer, the applicant can repay the money advanced by the bank at a later date. There are three ways to release documents in the import bills business: one is to release documents by virtue of trust receipts, the other is to release documents by virtue of import bills agreements, and the third is to release documents after the applicant has repaid the money advanced by the bank.

(4) Acceptance credit line.

According to the usance letter of credit, the issuing bank receives the documents to review the documents, if the documents are consistent with the provisions of the letter of credit, or the documents are inconsistent with the provisions of the letter of credit, but the importing enterprise and the bank that issued the letter of credit are willing to accept, the issuing bank can use its own credit commitment to pay the beneficiary at a certain date in the future, of course, this date must be determined in advance.

◆ Trade finance methods provided to exporters

(1) Package loan

Before providing the shipping documents, the exporter uses the supply contract and the beneficiary's letter of credit issued by the foreign bank to pledge it to the local bank to obtain the funds required for the purchase, production and shipment of the export goods.

(2) Bill discounting

According to the usance letter of credit, the exporter ships the goods, obtains the acceptance bill from the bank that issued the letter of credit or other payer, and converts the draft into cash at a discounted price at the local bank. With this financing method of bill discounting, the bank can have recourse against the bills that have been discounted.

(3) Export bills

The exporter submits the export negotiation documents to the daily correspondent bank or the bank designated in the letter of credit, and the interest and handling fees incurred from the negotiation date to the expected foreign exchange collection date shall be automatically deducted by the bank. The bank pays the net amount to the exporter first and retains recourse against the exporter.

(4) Forfaiting

Forfaiting, also known as "package bill", refers to the non-recourse financing of receivables by the package bank according to the requirements of the customer (the beneficiary of the letter of credit) or other financial institutions, after the issuing bank, the confirming bank or other designated banks make a payment commitment to the money under the letter of credit.

(5) Financing by export credit insurance

Export credit insurance is a kind of policy insurance, the purpose of which is to encourage enterprises to expand exports and provide a strong guarantee for the safety of export receipts. L/C insurance is a kind of export credit insurance, which can contract export enterprises to pay for the risk of foreign exchange collection arising from L/C, and ensure that export enterprises can receive accounts as scheduled after submitting documents in accordance with regulations. If the export enterprise fails to receive the account on time due to political and commercial risks, the agency will make up for its losses. At the same time, for enterprises that have purchased export credit insurance, banks will provide corresponding financing services for them.