CMB provides drawing rights financing to distributors under an agreement between CMB, the supplier and distributor, and based on pledging the drawing rights of the commodity distributor.
·The supplier, distributor and CMB enter an agreement.
·The distributor pays a deposit of 30% of the draft amount to CMB. CMB issues a bank draft with the distributor as the drawer and supplier as payee, and instructs the supplier to deliver commodities worth 30% of the draft amount.
·The distributor recovers sales payment and pays the deposit.
·CMB notifies the supplier to deliver the commodities accordingly.
·The distributor pays the deposit in full.
·If the balance of the deposit account is insufficient on the maturity date of the draft, the supplier will return the shortfall to CMB.
·Enables suppliers and distributors to strengthen ties between, and helps suppliers lower financing and capital costs, recover receivables, improve capital utilization, and boosts sales.
·Solves distributors' liquidity problems, yields higher discounts from suppliers, and cuts sales costs.
All the contents stated above are for your reference only. Please consult the local branch of China Merchants Bank for further information. China Merchants Bank reserves the ultimate right of interpretation for the contents in this page.