I. Description
Domestic sellers transfer their creditor’s right over the legitimate accounts receivables to the Bank after selling commodities or services on credit in ways other than L/C settlement, and the Bank provides comprehensive financial services integrating collection, management of account receivables, bad debt guarantee and financing to domestic sellers.
Factoring financing can be divided into factoring with recourse right (repurchase) and without recourse right (buy-out) based on the condition that whether the Bank is able to sell account receivables to the seller. It can be divided into notification factoring and non-notification factoring based on the condition that whether the Bank shall notify the buyer the fact of account receivable transfer.

II. Product Functions
i. Through its nationwide network, the Bank can assess the buyer's credit and undertake its credit risk, promising to take the payment responsibility when the buyer is unable to make payment (excluding the circumstances such as transaction disputes, labor disputes etc.), thus effectively playing the role of risk guarantee. In business operations, the customer can get financing and other factoring services by only presenting the transaction contract, invoice and other documents.
ii. The Bank offers the seller financing facility through advances to ease working capital occupation by account receivables and improve enterprise's cash flow. Under the buy-out mode, the Bank helps enterprises convert "receivables" into "income", thus optimizing their financial statements.
iii. Compared to working capital loans, factoring has a more flexible term as it can effectively reduce the customer's financing cost, and reduce the customer's management cost through credit survey, fiscal management, collection services etc.
iv. Based on factoring service, the seller is able to expand its downstream customer base, broaden market, increase turnover and lift profit margins through sale-on-credit.

III. Target Customers
i. Applicable to domestic cargo/service transactions that adopts the sale-on-credit payment method in principle;
ii. The sellers who hope to expand business through sale-on-credit, but worry that excessive low turnover of account receivables due to buyers’ credit risk may cause working capital turnover difficulties, and wish to control risk during market expansion;
iii. The buyers (debtors) who take a predominant position and wish to get external financing support in order to reduce internal financing cost against urgent financing demand of the upstream customers; and
iv. The sellers who wish to reduce cost of account receivables management and collection.

IV. Qualifications
i. Approved/registered in accordance with the law, having obtained corporate business license or other valid documents that certify the company’s business legality and business scope;
ii. Lawful and valid transactions, and the buyer and the seller agree to settle relevant transactions through sale-on-credit or deferred payment;
iii. The seller effectively performs the contractual obligations; generation and ownership of the account receivables are clear and the ownership hasn't been transferred or pledged etc.; and
iv. Meeting other requirements of the Bank.

V. Handling Procedures
i. The seller submits to the Bank factoring business application, as well as materials such as business license, purchase/sales contract etc.;
ii. After the Bank completed business investigation, the seller signs factoring business agreement with the Bank and transfers ownership of the account receivables to the Bank;
iii. The Bank informs the buyer of the account receivables transfer based on business type, and requests the buyer to confirm payment information;
iv. The Bank provides financing to the seller; 
v. If the buyer pays the Bank on maturity date of the account receivables, the Bank will deduct the loan principal and interest, and repay the balance to the seller; and if the Bank doesn't receive any payment from the buyer on the maturity date, the ICBC will start claim procedures pursuant to relevant provisions of the factoring contract.

Note: Information on the page is for reference only. Please refer to announcements and regulations of local outlets for specific business.