I. Description Your company and exporter have agreed to adopt O/A to settle loans, taking bank payment bond as a guarantee. ICBC's IAP "Packages will offer full professional services to you like settlement, financing and exchange rate risk aversion, etc. Brief flow chart is as follows:
II. Transaction occasion Your company and exporter have agreed to take bank payment bond as a guarantee, and adopt O/A as goods loan settlement method.
III. Functions and characteristics 1. ICBC will offer your company with the professional package services, including settlement, financing and exchange rate risk aversion. 2. We will help you reduce financial cost, avoid exchange rate risk and improve the market competitiveness.
IV. Warm tips 1. Your company should be assessed credit grade and credit line by ICBC. 2. Your company can decide whether to transact import T/T financing business according to your own situation of financial funds.
V. Cases Company A has imported a number of raw materials from Company B, and the raw materials cost 1 million USD. They agreed to adopt O/A 60 days as settlement method. It is up to Company A to apply for a payment bond, which has 90 days' validity as guarantee from ICBC. The bond circulation period of Company A's processing, production and sales is about 5 months.
At the end of March, ICBC established a payment bond of 1 million USD for Company A. Company B delivers goods as soon as it receives the payment bond. In order to lock the exchange rate risk, Company A also established a 6-month forward purchasing and remittance. At the end of June, the O/A is due, ICBC begins to issue T/T financing loan for Company A and transfers loan to Company B. at the end of September, Company A's sales payment is withdrawn, pays back the financing principal and interest after transaction of forward purchasing and remittance.