Factoring is a comprehensive financial tool commonly used in international trade, the core of which is the transfer and recipient of receivables. CCB provides the domestic factoring service that is close to the reality of the domestic market. CCB offers not only the financing for advance payment based on receivables, but also the overall credit management service that covers the whole process of the credit sales with the help of commercial credit investigation, receivables management, and guarantee for credit risks.
CCB provides domestic factoring business for companies that sell goods on credit and have a large amount of receivables. It is based on the sale contract between the seller and the buyer. In such service, CCB provides the buyer with financial support and other services (sale account management, pressing for the payment of receivables, control of credit sales and guarantee for credit risks) by purchasing the buyer’s receivables. So far, CCB has offered effective financial solutions to many MNCs and domestic clients and helped them to solve the problem of receivables.
Domestic factoring business can bring many benefits to the two parties:
1. The seller could invest the money got from advance payment in more business and expand the sales, without being troubled by the large receivables. In the nonrecourse factoring business, the seller can get payment guarantee from the CCB through its credit risk guarantee service; by transferring the receivables, the seller can improve the structure and indicators of his financial statement; he could know in advance the credit information of the buyer, and control the credit sales; he could reduce the financial cost with the help of financial management and account information analysis provided by CCB.
2. The buyer could be granted with preferential payment conditions of the sales on credit, and expand the volume; he could receive more purchase-on-credit orders from the seller with his own integrity and good financial performance, no guarantee or collateral being needed; no additional business is necessary and charges from the traditional way of settlement will be exempted.
Seller’s company will follow the following procedures when applying for factoring at CCB:
1. Verify the amount, and sign the contract. The seller submit to CCB the necessary documents, while CCB reviews the seller’s qualification, and conducts investigation into his business, which will help CCB decide the potential buyers, the maximum amount of payment in advance, and the guaranteed amount of credit risks (nonrecourse factoring). After that, company (the seller), signs the factoring contract with CCB.
2. Single factoring deal. The seller dispatches goods, and submits necessary vouches and other documents to CCB, asking to transfer the receivables. CCB confirms the transfer, and sends out a notice, verifying the disposable amount of the payment in advance which the seller can use freely. CCB informs the buyer that money should be paid when the term expires, and remit the rest of the fund to the seller after money is received from the buyer.
Interest and charges of the domestic factoring business will be negotiated between you and CCB in accordance with the People’s Bank of China’s rules.