CMBC Factoring

Introduction to Minsheng Factoring

Under the guideline of “Go specialized to provide unique trade and finance services”, Minsheng Bank’s Trade Finance Department energetically builds its brand image as a “trade financing expert”, and devotes itself to product innovation, so as to provide clients with all-round financial service solutions. As a blockbuster product of Minsheng Bank’s trade and finance service, Minsheng Factoring wins clients with its high content of technology and considerate service, and has built a good reputation in the market.

Based on a client’s receivables and payables, Minsheng Factoring provides the client with an all-round solution that integrates settlement, financing, credit risk guarantee, maintenance of accounts, financing for upstream and downstream supply chains, relevant maintenance of cross-border accounts, and other financial services.

Definition and benefit of factoring

Basic definition of factoring: the seller assigns to Minsheng Bank its receivables generated from its credit sale of products or services to the buyer, on the basis of which, Minsheng Bank will provide the seller/buyer with financing, maintenance of sales ledger, collection of receivables, buyer’s credit risk guarantee and other relevant financial services.

Based on whether the seller and buyer are in the same country or region, factoring business is divided into domestic factoring and international factoring; based on the entity of business, it is divided into seller’s factoring and buyer’s factoring; based on whether recourse to the seller is permitted, it is divided into recourse factoring (non-buy-out factoring) and non-recourse factoring (buy-out factoring); based on whether the buyer is notified that the receivables are assigned, it is divided into disclosed factoring (open factoring) and undisclosed factoring (concealed factoring).

Benefit brought by factoring service to clients:

To sellers

﹡O/A payment terms that are more competitive can be offered to new or existing clients, which will help expand domestic and overseas market and increase business turnover;

﹡the receivables can be liquidated into cash earlier, so that working capital is more sufficient, and the enterprise’s performance can be better

﹡ the enterprise’s financial position, as well as its financial statement, can be improved

﹡Minsheng Bank offers credit risk guarantee to eliminate the risk related to buyer’s payment, so that the seller need not worry about it

﹡professional factors will collect and maintain receivables, helping relieve the client’s pressure of financial management

﹡in international factoring, settlement of exchange can be performed immediately after financing, so that exchange rate risk can be evaded

To buyers

﹡using preferential O/A payment terms, a limited amount of capital can buy more goods, so that capital turnover rate is higher and business turnover is bigger

﹡the bank’s guarantee can extend the time of payment

﹡goods can be received before payment, so that risk of commercial fraud is eliminated

﹡formalities of opening an L/C are avoided, making trade easier

Advantages of Minsheng Factoring:

1. a hi-tech platform is used to provide an efficient and simple business operation process. The international factoring business system has realized full digitalized processing and paperless work of international factoring business; the most efficient EDI system is used for business contact with overseas partners

2. An international factoring business cooperation network covering countries and regions in north America, continental Europe, and south Asia has formed; currently the countries and regions capable of handling international factoring business include most European countries and regions, US, Canada, Mexico, Brazil, Chile, Argentina, South Africa, Australia, New Zealand, Japan, Korea, Singapore, Malaysia, Thailand, Taiwan, Hong Kong, etc.

3. In July 2008, the best Asian factoring management team was introduced and Minsheng Bank’s factoring business department that adopted a wholly new management mode leading the factoring industry was set up. In 2013, a high-quality professional factoring team with FCI (Factors Chain International) certification has formed. It has its own specialized professional assessor, and a professional member/international expert on the FCI Education Committee (one of the only five members in the whole world, also the only one in China).

4. After years of development, Minsheng Bank’s factoring business has achieved good performance widely recognized within factoring industry. Its volume of international two-factors factoring business and number of transactions both rank the second in Chinese factoring industry, superior to many other banks. In 2010, it won the title of FCI Advancing Export Factor of the Year; in 2011, it won the title of Developing Global Factoring Market of the Year.

5. Thanks to its business development and innovation efficiency that both lead the factoring industry, it offers one after another new products, along with specialized and integrated financial solutions.