Is there a big difference between export bills and letters of credit?

Is there a big difference between export bills and letters of credit? Essential difference: bills are just a form of financing, similar to mortgage loans; A letter of credit is a form of payment. Not only payment by letter of credit can be negotiated, but also collection can be negotiated.

Export bills are short-term financial facilities provided by banks to exporters according to the documents submitted by exporters under letters of credit or collection, including sight bills, forward bills/discount bills and collection bills under letters of credit.

Export bill is a short-term financial instrument in which the exporter submits a complete set of export documents to the commercial bank, and the bank deducts the interest and related expenses from the date of issue to the expected date of collection according to the par value, and pays the net amount to the exporter in advance. Export bills are divided into bills of exchange under letters of credit, bills of exchange under documents against payment and bills of exchange under documents against acceptance. ..

What's the difference between export negotiation and documentary credit? In the case of export letter of credit, the beneficiary applies to the bank for short-term financing with the documents that meet the requirements of the letter of credit and ensure the collection of foreign exchange, so that the customer can get the advance payment from the bank in advance before the arrival of foreign exchange and speed up the capital turnover.

Letter of credit negotiation means that the negotiating bank pays the payment to the beneficiary's account after receiving the payment from the issuing bank, and the period from export to beneficiary's collection is relatively long.

Export Bill/Export Bill/Export Bill/Export Bill Export Bill refers to that when an enterprise (beneficiary of a letter of credit) submits the documents under the letter of credit to the bank for negotiation, the bank (negotiating bank) will review the whole set of documents submitted by the enterprise as pledge according to the application of the enterprise. A short-term export financing business that advances money to the enterprise with reference to the par value after verification, then sends a draft to the issuing bank, collects interest and bank charges from the enterprise, and reserves the right of recourse.

Letter of credit draft

operation flow

Exporters apply to commercial banks for bills of exchange according to business needs, and after the banks pass the examination, they sign the general pledge of export bills with exporters; After each shipment, the exporter fills in the application for export bill of exchange, applies for financing from the bank, and submits all the documents required by the letter of credit or trade contract to the bank; Banks review relevant documents and remit money to exporters; Banks send foreign drafts for foreign exchange; Return the export bill after receiving the foreign exchange. The definition of import bill refers to that after receiving the order under the letter of credit and verifying that it is correct, the applicant of the letter of credit can't pay the bill in time due to the cash flow relationship, pledge the documents representing the rights of goods under the letter of credit, and provide necessary mortgage/pledge or other guarantees at the same time, and the bank will pay the bill first for the foreign party.

enterprise function

When the customer applying for the import letter of credit can't pay on time, the issuing bank can pay in advance on his behalf, so that the customer can obtain short-term financing. At the request of customers, banks provide financial services to customers in the import settlement business. When a customer applies for an import bill, he must issue a bill application and a trust receipt to the bank, and transfer the ownership of the goods to the bank. On this basis, the bank will give the goods title certificate to the customer and pay for it on behalf of the customer.

Commercial characteristics

1. The funds shall be used exclusively for external payment under documentary credit.

2. Import bills are short-term financing, and the term generally does not exceed 90 days. For a usance letter of credit within 90 days, the sum of the draft term and the usance term shall generally not exceed 90 days.

3. The interest rate of imported bills is calculated and collected according to the current working capital loan interest rate of the bank.

4. The proportion of bills and the term of bills shall be determined by the bank according to the actual situation.

5. Import bills should be applied one by one and used one by one.

Export bills and discounts

This business refers to the business that banks lend money to exporters with the complete shipping documents under the letter of credit provided by exporters as collateral before receiving the payment from the issuing bank. Discounting means that banks have the right of recourse to buy unexpired forward bills and provide customers with short-term financing business. For customers, if they receive foreign exchange at sight, they can apply for export bills; If it is a long-term foreign exchange receipt, you can apply for export discount if you accept it in a foreign bank.

Business needs

1. The applicant of export draft should be the beneficiary of documentary credit and have a good reputation. When banks provide export bill financing to customers, they will sign a general commitment letter with customers, requiring them to apply one by one. The bank will handle the export draft according to the documents consistent with the documents submitted. Foreign currency interest is charged at the interest rate stipulated in the export bill.

2. Export bills are financing that banks reserve the right of recourse to exporters, but banks cannot exercise the right of recourse as confirming banks, paying banks or accepting banks.

Purchase of export bills

3. Banks only discount bank acceptance bills under documentary credits, and the applicant shall submit a discount application to the bank for discount business, and acknowledge that the bank reserves the right of recourse for discounted advances.

4. The discount period of bills shall not exceed 180 days, and the discount days shall be the actual days from the bank discount date to the maturity date. The discount rate will be implemented according to the regulations, and foreign currency discount interest will be charged, which will be deducted from the ticket amount.

Can you explain: What is the difference between export bill of lading under letter of credit and export bill of lading under documentary collection? Thank you in advance for learning from you. The difference between export bill of lading under letter of credit and export bill of lading under documentary collection is that the basis of bill of lading is different-the former is that the bank advances the price to the beneficiary according to the documents presented by the beneficiary under letter of credit; The latter is that the bank advances the price to the exporter according to the exporter's documentary collection. The fundamental difference between the two is that the risk of the former is less than that of the latter, because the former is based on bank credit and the latter is based on the importer's commercial credit.

The difference between export bill of lading and negotiation under traditional letter of credit settlement: there is no difference in essence between export bill of lading and negotiation under traditional letter of credit settlement, that is, both of them are essentially a financing behavior of banks to exporters.

If there must be a difference, then the difference lies in the formalities-the beneficiary (exporter) needs to apply for a bill of lading from the bill bank in the case of consistent documents, and the bank will issue loans to the exporter with the exporter's future income right as collateral; In addition, bills of exchange are applicable to various settlement methods such as D/P, D/A and L/C.. However, this procedure is not necessary for negotiations. As long as the documents submitted by the beneficiary (exporter) are consistent, the negotiating bank will advance the beneficiary before the issuing bank in accordance with the negotiation instructions of the letter of credit. Negotiation refers to the settlement of documents under the letter of credit.

The difference between export bill and export negotiation 1. Negotiation is a unique concept in letter of credit transactions. Under negotiation letter of credit, only the bank designated by the issuing bank can negotiate the beneficiary's matching documents.

2. Negotiation is not limited to L/C transactions. Any bank can finance the accounts receivable of export enterprises, which are collectively called negotiable instruments.

The difference between export bill and forfaiting export bill lies in the financing business of all documents under the letter of credit. Enterprises can apply for bill payment after presenting documents. Documentary loan banks have recourse. That is, if the letter of credit fails to receive the payment, the borrower will also repay the bank.

Forfaiting is a documentary financing business under a forward letter of credit. Only after the issuing bank accepts the documents can it apply for a loan. Moreover, this loan is equivalent to foreign exchange collection, and the bank has no recourse.

The difference between export bill and export settlement. Pray for God's help in export negotiation refers to a short-term export financing business in which when your enterprise (the beneficiary of the letter of credit) submits the documents under the letter of credit to the bank for negotiation, the negotiating bank will review them according to your application, and after the review is correct, advance the money to your enterprise with reference to the par value, and then send the bills to the issuing bank for remittance, and collect the bill interest and bank charges from your enterprise, and reserve the right of recourse. Collection and settlement of foreign exchange, also known as collection and payment, means that the negotiating bank, after receiving the export documents of foreign trade companies, sends them to foreign paying banks for handling the goods, and when receiving the credit notice of the paying bank to pull the payment into the negotiating bank's account, converts them into RMB according to the foreign exchange quotation of the day and gives them to foreign trade companies.

What is export bill? What's the interest rate for export bills? 1. Export draft refers to a short-term export financing business in which when an enterprise (beneficiary of a letter of credit) submits a document under a letter of credit to a bank for negotiation, the bank (negotiating bank) reviews it according to the application of the enterprise, and after the review is correct, advances the money to the enterprise with reference to the par value, and then sends a draft remittance to the issuing bank, and charges the enterprise with the interest of the draft and bank charges, and reserves the right of recourse.

The interest rate is calculated according to the loan interest rate of foreign exchange working capital in the same period, and the term is from the date of negotiation to the expected date of foreign exchange collection.

2. The currency of the export bill is the original currency of the document, and the interest rate of the bill is determined according to the international financial market, the financing cost of the applicant bank, the credit risk of the issuing bank and other factors.

The proportion of the bill amount shall be approved by the bank according to the actual situation, and the maximum is 100% of the bill amount. After deducting bank charges and bill interest, the net amount is transferred to the enterprise account. If the actual date of receipt of foreign exchange exceeds the period of negotiation, the bank will make up the interest on negotiation from the enterprise.

The term of spot export draft is determined according to the region and route of export receipt, and the term of forward letter of credit is from the date of receipt of acceptance from the issuing bank to the third working day after the payment is due. If the payment for the negotiable instrument has not been recovered after the expiration of the negotiation period, the bank has the right to exercise the right of recourse against the enterprise and recover the amount of the instrument, interest and bank charges.

3. Export bills are mainly divided into export collection bills and export letter of credit bills.

Export collection bill refers to the short-term financing provided by the bank to the exporter according to the collection documents when the exporter submits the documents and entrusts the bank to collect money from the importer.

Export letter of credit draft refers to the short-term financing provided by the exporter (the beneficiary of the letter of credit) to the exporter after loading the goods, preparing documents according to the requirements of the letter of credit, submitting them to the bank for negotiation, and the bank reviewing the documents.

2. The scope of export bills handled by China Bank includes: export bills under letters of credit and export bills under documentary collection; Foreign currency export bill of lading and RMB export bill of lading are the business activities of China Bank to provide exporters with documents consistent with the documents under the letter of credit before receiving the payment from the issuing bank, and they are also the financing for China Bank to reserve the right of recourse for exporters. The applicant for export negotiation should be the beneficiary of documentary credit with good credit standing, and submit a written application to the Bank of China one by one when presenting the documents, so as to ensure that the principal, interest and various expenses paid by the Bank of China will be repaid immediately when the export documents are rejected or accepted due to discrepancies or other reasons.