I. Description
Commercial draft discounting by interest agreed is the business that the bearer, before maturity of its legally held commercial drafts, applies for discount service in the form of endorsed transfer to ICBC discounting acceptance institutions, and ICBC discounting acceptance institutions, which pay the bills in advance to the bearer as per the par value or the related agreed amount, with the discount interest to be borne by the interest paying party as agreed in the agreement. The interest paying party can be the buyer, the seller, or a third party or another party designated in the agreement, and the discount interest can be borne solely by one party, or jointly by two or more parties.

II. Target Customers
Business entities with short-term financing needs and a prominent seller’s market.

III. Features and Advantages
i. In this business type, the seller is only required to handle the discount procedures, and does not have to bear the discount interest, which is equivalent to collecting payment for goods in cash;
ii. The buyer can procure spot goods with deferred payment, and may also enjoy a favorable business discount;
iii. Official vouchers for interest payment will be issued to the interest paying party and can be accounted for in the cost as financial expenses, so the fund cost consists of only the discount interest, which is greatly lower than loan interest, helping reduce the buyer’s financial expenses and financing cost;
iv. The discount interest can be paid flexibly: by the buyer, the seller, or a third party as freely agreed.

IV. Conditions
A tripartite agreement.
Refer to the Commercial Draft Discounting for further details.

Note: The information on the page is for reference only. Specific businesses are subject to announcements and regulations of local outlets.