Receivables transfer refers to the fund-raising convenience offered by BOCOM, through receivables transfer, to help alleviate cash-flow inadequacies facing the customer promptly as a result of an increase in receivables. During the transfer period, the transferor (seller) entrusted by BOCOM is responsible for calling on the transferred receivable transfers from merchandize purchasers. If BOCOM is unable to retrieve the full amount of receivables before the deadline, the transferor shall buy back the uncollected balance portion unconditionally.
(1)Timely retrieval of funds, this avoids cash-flow shortages caused by the company’s credit extensions
(2)Improvement of the company’s financial status, with its asset liquidity enhanced.
(3)Provision of convenience for company’s credit extensions.
(1)Eligibility criteria for transferor;
a. Preferably a quality BOCOM customer with a credit rating above AB;
b. Good business operation, with a stable market for its products;
c. Meets BOCOM’s requirement as a borrower with guarantee-exemption
d. Providing bona-fide documents on one’s financial status, business conditions, catalogue of purchasers; names and credit-standing as required by BOCOM.
e. Transferor has opened a settlement account at BOCOM.
(2)Eligibility criteria for receivables acceptable to the bank
a. Receivables arising from product transactions carried out by transferor through credit extensions;
b. Receivables arising from legal, bone-fide, dispute-free product transactions;
c. Transferor has signed a sales contract with buyer, with proof of sales invoice and delivery certificates generated under the contract.
d. Receivables that, in principle, have been generated in the recent 30-day period.
Besides providing the documents for a loan request to BOCOM for working capital, the transferor is also required to complete the following procedures:
(1)Submit an application for receivables transfer together with a detailed checklist of receivables;
(2)Submit the original and duplicate copies of the sales contract, together with proof of commercial invoices and delivery certificates for the receivables;
(3)Submit basic information, including credit rating, of the merchandise purchaser;
(4)Upon BOCOM’s approval, a “Transfer of Receivables Creditor’s Rights” agreement will be signed with the transferor;
(5)Within three working days upon signing the agreement, the transferor is required to submit an original copy of “Notice of Receivables Transfer” to the buyer, with a duplicate copy to be submitted to BOCOM for custody.