The difference between trade financing and traditional enterprise loans

The difference between trade financing and traditional enterprise loans

Trade financing should not be a single credit model, but a way to solve the financing problem of enterprises. Each industry may have different final trade financing methods, because each industry has different industrial chains, different settlement methods and different trade practices. So do you know the difference between traditional corporate loans and trade financing?

1. The first repayment source of trade financing is the direct income (such as accounts receivable) or indirect income (such as sales income after goods are obtained in advance) of this trade, and the purposes are also directly related to this trade, such as stocking goods and organizing production. Therefore, the evaluation of the security of a single transaction by trade financing is more important than the comprehensive evaluation of the borrower. This is sometimes what we call trade financing? A pen? Reason.

Trade financing is a financing method attached to trade. Although the financing subject is also an enterprise, the background of this financing must be that the financing subject has one or more industries.

2. Working capital loans are loans issued to meet the short-term capital needs of producers and operators in the process of production and operation, and to ensure the normal production and operation activities. In fact, working capital loans are mainly funds paid to maintain the operation of enterprises, including purchasing raw materials, paying wages and paying taxes. In contrast, this concept is fixed assets loan, which is mainly used for fixed assets such as infrastructure and equipment purchase. Including RMB and foreign currency loans. At present, banks need to adopt the method of entrusted payment to monitor the use of working capital loans. In general banking, working capital loans are mainly used to buy raw materials.

3. From the perspective of banking, in addition to the above, the main differences include the following:

First, the background of trade financing

Generally, there is real trade without trade background, let alone trade financing; The background of mobile loan issuance is much more diversified, such as no money to pay for the goods, salary at the end of the year, insufficient CCTV advertising fees and so on. , there can be no deal.

Second, working capital loans.

It is common to pay real money, directly to the account, and the term is more than 6 months; In addition to loans, trade financing should also include indirect currencies, such as letters of credit, drafts and other so-called off-balance-sheet businesses, with a term of more than 6 months.

Third, trade financing.

Distribution targets are mainly import and export enterprises; The objects of current loans include import and export enterprises, as well as non-import and export enterprises, such as hardware machinery parts manufacturers, self-employed individuals selling mobile phones at the entrance of the vegetable market, meat joint companies and so on. From the perspective of banking practice, the scope is wider.

4. Liquid RMB loans.

Mainly distribution, less foreign currency; Trade financing is a mixture of RMB and foreign currency. Some trade financing products also stipulate that foreign currency loans cannot be settled, while floating loans can be settled.

What is trade financing? Trade financing means that in commodity trading, banks use structured short-term financing tools to finance assets (such as crude oil, metals and grains) in commodity trading. The borrower in trade financing has no other production and business activities except the income from commodity sales, no substantial assets on the balance sheet and no independent repayment ability. Trade financing factoring provides trade financing without recourse, which is convenient and simple, and basically solves the problems of exporters selling on credit and taking up short-term funds on the way.

Trade financing is a service provided by commercial banks, aiming at promoting import and export business between countries and enterprises. The difference between exports and imports is a country's trade surplus.

Service mode:

Credit opening

It means that banks open letters of credit for customers to reduce deposits within the credit line.

import bill advance

Refers to the short-term financing provided by the issuing bank to the applicant to pay the amount of the letter of credit when receiving the full set of documents under the letter of credit. What is trade financing? What is trade financing? .

Import bills are usually used with trust receipts. The issuing bank releases the documents under the letter of credit to the applicant on the basis of the trust receipt issued by the applicant to the bank, and the applicant goes through the formalities of picking up the goods, customs declaration, warehousing, insurance and sales in advance free of charge, and pays the amount of the letter of credit and related interest paid by the bank with the funds returned after the goods are sold.

Delivery by bank guarantee

In the import trade settled by letter of credit, the goods arrive at the destination before the freight documents, and the issuing bank will issue the guarantee documents to the carrier or its agent according to the importer's application, and bear the liability for compensation caused by the early delivery.

Export bill service

It refers to a trade financing business in which the beneficiary of a letter of credit pledges a full set of shipping documents to the local bank after the goods are shipped, and the bank pays the beneficiary in advance after deducting interest and related expenses, and then claims from the issuing bank to recover the payment.

packing credit

It means that after receiving the valid letter of credit issued by the importer's bank, the exporter applies to the bank with the original letter of credit to obtain short-term RMB liquidity financing for the production, procurement and shipment of export commodities under the letter of credit.

Discount of foreign exchange bills

It means that the bank pays the balance of the par value after deducting the discount interest to the holders of foreign exchange bills before the maturity.

International factoring

It refers to the guarantee that a bank or an export factor will conditionally give up the right of recourse through an agent bank or an import factor, approve and purchase the exporter's accounts receivable, and enable the exporter to recover the payment after export.

Forfaiting

Also known as bill package purchase or bill buyout, it refers to the non-recourse discount (that is, buyout) of long-term acceptance bills or promissory notes held by exporters in the form of deferred payment in international trade by banks or package buyers.

Export buyer's credit

It refers to providing medium and long-term credit to foreign borrowers, allowing importers to pay for goods from China exporters, and promoting the export of goods and technical services from China.

In the export buyer's credit, the loan object must be the importer's bank approved by Industrial and Commercial Bank of China to import goods from China, or the importer under special circumstances. Export equipment supported by commercial loans should be mainly made in China.

The bank's approach to trade financing is basically the same, but there are still subtle differences. When choosing a trade financing bank, it is necessary to operate concretely.

;