Definition of Factoring

Factoring means that between the factor and the seller there exists a kind of contract, based on which the seller transfer its present or future accounts receivable arising from the goods sales contract signed between the seller and its customer (buyer) to the factor, who will provide financing service integrating trade financing, sales account management, accounts receivable collection and credit risk control.

Material to be submitted by client

1. Duplicate of business license annually reviewed;

2. Tax registration certificate, organization code certificate, identity certificate for legal representative of enterprise, corporate charter and loan card/certificate;

3. Factoring Application;

4. Audited Financial Statements for the last three years;

5. Detailed information on accounts receivable;

6. Information on payer for accounts receivable;

7. Commercial sales contract and relevant proof on the applicant’s performance of the contract;

It is a kind of credit business to meet the working capital needs of corporate legal persons with their warehouse warrants, movable assets or rights for goods as collateral. Now our bank carries out this business by means of accepted bank draft, accepted commercial draft, import L/C and documentary credit.

The said warehouse warrants include standard warehouse warrants and non-standard warehouse warrants. Standard warehouse warrants are uniformly made by futures exchange. It is a document representing the right to get goods issued by the delivery warehouse designated by the futures exchange after reviewing and accepting the inbound goods. It becomes effective after registered with the futures exchange. Non-standard warehouse warrants refer to the documents representing rights and interests in forms of bill of lading and outbound bill etc that are recognized by our bank and with good liquidity in the production and logistic sectors.

At present the warehouse warrant and movable assets financing business introduced by our bank is not completely secured pledge, but a kind of integrated guarantee, i.e. one part is a certain proportion of security collateral, and the other part of credit exposure risks are controlled through warehouse warrant collateral, movable asset collateral or repurchase guarantee, purchase guarantee, automotive compliance certificate supervision etc.

Materials to be submitted by dealers

1. Business license for legal person, corporate charter, organization code certificate annually reviewed;

2. National Taxation and Local Taxation Certificates;

3. ”Franchising Contract” and “Sales Contract” signed with producers;

4. Acceptance Application;

5. Loan card and inquiry results (inquiry to be handled by CMBC);

6. Duplicates for audited financial statements of previous year and recent period, and taxation material of previous year;

7. Procurement tax invoices or sales invoices of last month.

Material to be submitted by producers

Business license for legal person, corporate charter, financial statements (not necessary if the producer belongs to famous large enterprise).