Import Invoice Financing (IIF)

Refers to a type of short-term loan provided to the Bank of China (Hong Kong) Limited Jakarta Branch (“Bank” / “BOC”) customer on a with recourse basis, for the purpose of financing purchase/payment of Goods and/or Services (“IIF Loan”) and other costs incurred in respect of the shipment or import of relevant Goods and/or Services such as: freight and logistics cost, Import Duties, etc., (“IIF Related Loan”) in which the Supplier sends all documents to the Purchaser directly.

Short-term financing requirement of the buyers / importers under open account trading.

1. Improves Cash Flow

   Importer/buyer can use bank financing to import and sell goods, and the proceeds from the sale of goods are used to repay bank financing/loans, which can reduce the occupying of their own funds to complete the trade and earn profits by requesting IIF to BOC.

2. Lessen the Cycle of Capital Turn Over

   Importer/buyer can use bank funds for financing, and repay the loan after the export payment is recovered/funds are returned, thereby improving liquidity of funds, seizing market opportunities, and maintaining good goodwill.

3. Improve Bargaining Power

   At the stage of signing the sales contract, the importer/buyer can change the payment terms from usance basis to sight basis, or shorten the payment terms to improve its bargaining power over the exporter.

4. Simpler documents requirement and procedure

   Compared to other financing solutions under documentary trade, IIF requires simpler supporting documents (i.e. invoice, delivery evidence, and/or billing document (for IIF Related Loan (if any))) for drawdown process.

5. To speed up the customs / logistic clearance process

   With IIF Related Loan, customs / logistic documentation can be processed immediately without waiting for the cash to be available. This enables faster release of goods from the port / logistic company, minimizing demurrage and storage cost.

The Customer (Buyer/Importer) may subject to fines and/or penalties for late payment of obligation to BOC in case of unable to pay BOC for the loan repayment on the loan maturity date due to the lack of source of fund.

1. Buyer/Importer who purchases and/or makes payment for Goods and/or Services under open account trading.
2. Buyer/Importer who has limited working capital and receives short payment terms from their supplier, or has related shipment or import costs such as freight, logistic, and import duties, which led to large cash conversion cycle
3. Buyer/Importer who wants to maintain relationship with their suppliers, or has other import-related fee/charges payment obligations.

1. The Customer submits the IIF application and the trade documents and/or supporting documents to Bank.
2. Bank checks customer’s credit limit and trade documents whether already comply with the terms and conditions.
3. Bank process the disbursement and transfer the proceeds to the supplier.
4. On maturity date, customer will repay the IIF.

Click here to know more about IIF product.