Virtues of import bill discount for importers:
Reduce the funding occupied — Applying import bill discount on issuing an L/C and/or import collection, which fully utilizes the bank credit to import goods and sell it domestically, the importer could complete the trade and gain investment profits at the same time without any occupation of his own funding;
Grasp the market opportunity — When the importer could not make payments and get the bills accordingly, by using the import bill purchase, he could get the title documents, pick up the goods, resell the goods and grasp the market as a result.
Optimize the funding management — If the importer encounters a better investment opportunity at the time of paying at maturity, and the prospective earning of the investment is higher than the interest cost of the trade finance, by using the import bill purchase, he could gain the investment profits without influencing the resale of imported goods, achieving the maximum of the funding efficiency.

Packing Loan
A packing loan is a special loan offered by the local bank to the exporter who has received qualified letter of credit, to be used under items of procurement, production and shipment, so as to support the exporter to implement the contract, effect delivery as scheduled.
Packing loan is a pre-loading short-term financing, which enables the exporter to purchase, prepare the material, produce and trade without difficulty even the self-owned funding is not sufficient.
Virtues of packing loan for exporters:
Expand trade opportunities – In case the exporter is short of self-owned funding, and has no way to procure the prepayment, the packing loan will help the exporter to develop business and grasp the trade opportunity successfully.
Reduce the occupied funding – Free the exporter from using its self-owned funding at the stages of goods preparation such as production, purchase and etc, relieve the pressure of work funding of the exporter.

Export Bill discount

Export bill discount is financing of money in transit supplied by the bank with the export bill as the mortgage as required by the exporter after delivers the goods and presents the documents requested by the letter of credit or the contract.
Export bill discount business has the following scope: the export bill discount under the letter of credit and the export bill discount under the documentary collection; export bill discount under sight letter of credit; export bill discount under usance letter of credit; and forfaiting.
Virtues of export bill discount for exporters:
Accelerate the funding circulation-The exporter can get paid in advance before the importer makes the payment, and the funding circulation is speed up;
Simplify the financing procedure-The financing procedure of export bill discount is simpler and more convenient than that of the working funding loans;
Improve the cash flow-Export bill discount can increase the present cash inflow of the exporter to improve the financial condition and strengthen the financing ability;
Save the financial expenses-The clients can choose the financing currency in accordance to the interest rates of different currencies in Bank of China, so as to minimize the financial expenses.
When to use export bill discount:
The exporter has limited current funding, and relies on rapid funding circulation to develop the business;
The exporter encounters temporary difficulty in funding circulation after delivering goods and before getting paid;
The exporter faces new investment chance after delivering goods and before getting paid, and the prospective income rate is surely higher than the negotiated interest rate.

Forfaiting

1. Characteristics and Virtues of Forfaiting
Forfaiting is a kind of trade financing that the bank, as the buyer-up, purchases without recourse or discounts the usance draft accepted by the issuing bank (or confirming bank) or documents against acceptance so as to provide finance to the exporter.
The introduction of forfaiting enables the exporter to provide favorable payment terms to the foreign importer in business negotiation, thereby increase the competitiveness in the export trade.
Usually, when adopting the usance letter of credit for settlement, the importer will compensate the exporter in pricing for the latter's banking expense. Based on the current bank charges for forfaiting, the compensation for the exporter is much larger than the expense arising from the bank's buy-up or discounting in forfaiting business.
More importantly, owing to the non-recourse feature, the exporter is completely free from the risks from political factors, exchange rate, interest rate and importer's credit that the exporter is likely to encounter in collection of payment. What's more, the exporter may make the verification of export and thus get the tax refunded in advance just after financing.
Evade various risks — Forfaiting business enables the exporter to transfer various risks resulted from deferred payment, such as interest-rate risk, currency risk, credit risk and political risk;
Advanced tax refund — With the buy-up, the exporter can present the verification sheet and thus get the tax refunded in advance;
Thorough financing — Forfaiting is a short & medium-term financing facility without recourse. Once the exporter obtains the financed fund, he will be exempt from the responsibility for the debt repayment; No fund occupancy — Under usance credit, forfaiting enables the exporter to obtain the payment immediately after the goods delivery and service provision and hence avoid fund occupancy;
Improve cash flow — Receivables become current cash inflow and it is beneficial to the exporter to improve financial status and liquidation ability so as to heighten further the fund raising capability;
Save administration cost — The exporter does not need to manage the receivables. The relative costs, as a result, will be reduced greatly;
Increase trade opportunity — With forfaiting, the exporter is able to facilitate the trade by deferred payment to the importer, and thus help the importer avoid funding tightness;
Realize price transfer — By knowing about the quotation of the buyer-up, the exporter can also transfer the corresponding financing cost into the sale price to reduce financing cost.
When to use forfaiting:
1) to perform verification of export and get tax refunded earlier;
2) to transfer risks from export collection;
3) to improve financial status by thoroughly removing the export receivables from the balance sheet;
4) In case of other investment opportunity before the receivables get paid and the expected returns is higher than all the forfaiting charges;
5)In case working funding is tight before the receivables get paid and other types of financing on a recourse basis are not preferable.
2. Documents Required for Forfaiting
Any client, with qualifications of an independent legal person, the loan certificate and the right to export, may apply to BIN for forfaiting service with presentation of the export documents, without necessarily an account opened with BIN.
The interest rate for usance credit buy-up differs in accordance with the L/C issuing bank's credit risk, the political risk and importer's risk. Therefore, the client needs to provide the relevant information for BIN, including name of the issuing bank, the country, etc. so that BIN may quote the price. An agreement will be signed between the client and BIN when the client accepts the quotation of the bank. BIN will release the fund upon receipt of the document against acceptance.