Import trade financing includes import documentary credit, import collection documentary credit, outward remittance financing, delivery guarantee, and overseas payment.
(I) Import documentary credit
Import documentary credit refers to the business in which a bank, under the premise of holding the right to import goods under the import L/C, provides short-term financing to the applicant when the applicant makes external payments, and the applicant repays the principal and interest according to the agreed interest rate and term. The applicant must be an enterprise or unit with legal person status and import and export rights, open a local currency or foreign currency account in the bank, have normal financial and operating conditions, good credit, maintain stable settlement business transactions with the bank, and have the ability to repay the principal and interest on time; the imported goods must be goods within the applicant’s main business scope and have good market prospects.
(II) Import collection documentary credit
Import collection documentary credit refers to a financing form in which a bank, as a collecting bank, pays externally on behalf of the applicant or has other paying banks pay externally on the premise of retaining the right of recourse to the customer after receiving the documents under the collection, and at the same time releases the bill to the customer.
(III) Outward Remittance Financing
Outward remittance financing refers to the business whereby, after the arrival of imported goods in international trade settled by remittance and paid on delivery as stipulated in the import contract, the bank provides short-term financing for part or all of the payables to overseas exporters based on the applicant’s written application, and the applicant repays the principal and interest at the agreed interest rate and term. Importers do not need to use their own funds to pay for the outward import remittances, and can obtain short-term financing from banks. Outward remittance financing speeds up the turnover of funds, and the financing procedures are simpler and easier than those of working capital loans; it can increase the current cash inflow of importers, thereby improving their financial situation and financing capabilities; they can also settle foreign exchange in advance to avoid exchange rate risks.
(IV) Guarantee of delivery
Guarantee of delivery refers to the situation in which, in import trade, when the goods arrive before the bill of lading or other title documents, the bank provides a written guarantee to the shipping company for delivery, promises to submit the original bill of lading in exchange for the guarantee, and guarantees to bear the fees payable by the shipping company and compensate for all possible losses. The importer can take delivery of the goods in a timely manner due to the bank guarantee, which speeds up the flow of funds and effectively protects the interests of the shipowner.
(V) Overseas payment
Overseas payment business refers to the short-term financing method provided by the bank’s domestic branch to the importer to pay the import payment under the settlement methods such as L/C, import collection, and T/T payment based on the credit status of the importer, on the premise that the importer issues a trust receipt and bears the financing costs. Overseas payment is applicable to various settlements, and import business under L/C, collection and remittance can be handled; financing is convenient and fast, import payment is included in trade financing management, credit lines are shared, and quotations are reasonably determined according to international currency market conditions, with reasonable and flexible prices.