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Term Loan
Term Loans are loans granted to enterprises to finance their long-term investments or fixed assets, e.g. factory, machinery and building etc. The length of maturity is normally above one year.
Withdrawal and Repayment
The principal can be drawn as needed by the borrower and pursuant to the terms & conditions of the Loan Contract.
The principal and the interest can be repaid by installments on a monthly, quarterly, semi-annually or annually basis. As term loans are a non-revolving facility, withdrawal will not be permitted once the principal is exhausted. In certain cases, the client may request a grace period, during which the borrower only needs to pay the interest. If the amount of the term loan is very large, we will organize a syndicated loan through cooperation with other banks.
Working funding Loan
Working funding loans are loans granted to enterprises to finance their short-term investments and current assets, with a period of less than one year, and normally can be used on a Revolving basis. Main types of working funding loans include:
1.Overdraft Loan
An overdraft loan is a short-term revolving credit line for enterprises. The bank sets a credit line for the debtor based on the latter's application. Within the credit line and the term of loan agreement, without prior notice to the bank, the debtor can withdraw and repay at any time from and to the account, without restriction in terms of the withdrawal amount and repayment frequency. The interest is calculated by the days of the actual amount of funding employed.
The length of an overdraft loan is usually one year. As an overdraft loan is characterized by flexibility and convenience, where the funding can be employed and repaid instantly, so it can help an enterprise save financial cost.
(Due to SAFE policy, overdraft loans are currently available to foreign companies only.)
2. Demand Loan
Demandloan is a short-term revolving financing limit. The bank sets an upper limit of loan to a borrower on the basis of his/her application. The bank will grant an amount to the borrower, provided this amount is below the limit, it is before maturity date and the borrower has notified the bank three days in advance of the drawing. The borrower may repay any time, and the interest is calculated based on the days of the actual amount of funding employed.
The limit of a call loan usually has a term of one year. As the call loan is characterized by flexibility and convenience, where the funding can be employed and repaid instantly, so it can help an enterprise save financial cost.
3. Loan Pledged by CDs
T his facility is provided for customers who deposit cash in BIN in the same currency or equivalent value in other currency as collateral to secure the loan.
Requirements:
1) Enterprises with foreign investment (3 types) in China , foreign enterprises and individuals
2) Limit of loan: The maximum is 90% the face value of the certificate of deposit (CD).
3) Term: The loan term does not exceed the maturity date of the CD.
4) Interest rate: The interest rate of the loan is the interest rate of the deposit plus the interest rate differential.
5) The borrower provides the bank with the application and the documents regarding the loan application.
In particular cases, the bank may accept the CDs of another bank as collateral, but a written conformation by the deposit bank on the collateral is required. |
This service is to guarantee the account party against his default in payment and/or default in performance (project) to a third party/beneficiary.
Bank guarantees include:
Bid Bond
This is a guarantee issued for a customer who needs as the qualification for participating in a tender.
Performance Bond
This is to guarantee the account party against his default in performance (project) after winning a tender.
Advance Payment Bond
This is to guarantee issue to the beneficiary against the default in contract performance of an account party who receives an advance payment. The risk of this guarantee is higher than the above two bonds.
Payment Bond
In order that the client can make purchases in the form of keeping an account and pays in a certain period in time, the bank issues the beneficiary a guarantee against the default in payment of the client.
Shipping Guarantee/Steamship Guarantee
This is a service for an importer who is buying under Letter of Credit when the merchandise arrives before the documents does. The importer may wish to take delivery of the merchandise immediately while being unable to present the documents under the L/C. As a solution, the bank issues a shipping guarantee to the shipping company to release the goods and thus assume all liabilities for the merchandise. |
Syndicated Loan
A syndicated loan is a loan arranged by one bank and participated by other banks and non-bank financial institutes, which adopt a uniform loan agreement as reached under the arrangement of the lead bank to disburse the loan to the same project or enterprise. A syndicated loan is normally of a large amount and its participating creditors share the return and risks together. The banking syndicate/consortium is an agreement organization which comprises of the lead bank, the agent bank, the participating banks, etc. The percentages of the loan undertaken by the members are decided based on free will and negotiation; the members should fulfill their duties and responsibilities in accordance with the agreement. A syndicated loan can help the bank diversify the loan risks, and is usually designed for large & medium enterprises and key projects which require a substantial amount of finance. The management fee, commitment fee, agent fee and other expenses are assumed by the borrower. |
