Forfaiting

Bank of China (Thai) Public Company Limited (BOCT) offers forfaiting services that purchase outstanding claims resulting from the sale of goods or services, without recourse. Accepted types of claims include Letters of Credit (L/Cs), which are documents issued by issuing banks that guarantee payment to sellers on behalf of buyers. Forfaiting provides an alternative financing option for businesses in need of immediate cash flow, rather than waiting for payment on their usance L/Cs.

1. BOCT purchases accounts receivable from customers without recourse, providing a secure way for customers to access funding using their accounts receivable as collateral.
2. Mitigate risks. Customer transfer risks as credit risk, exchange rate risk, and interest rate risk to BOCT, customers can mitigate potential losses and manage their financial risks more effectively.
3. Not occupy the customer's credit line, allowing customer to get financing from BOCT without affecting creditworthiness or available credit.
4. Increase working capital. Customers can obtain 100% financing for the accounts receivable, which turns future cash flows into current cash flows and improving cash flow without increasing liabilities and leading to a more optimized financial statement.

1. Exporters who have limited working capital and need to accelerate the turnover rate of accounts receivable.
2. Exporters who want to mitigate credit risk, country risk, interest rate risk, and exchange rate risk faced by long-term accounts receivable.
3. Exporters who have insufficient or no credit line with BOCT and would like to find forfaiting as a viable financing option.
4. Exporters who want to obtain the export tax rebate in advance.

1. Exporters sign the Forfaiting Agreement with BOCT.
2. Upon receipt of the acceptance/undertaking notice from the issuing bank/nominated bank under the L/C, the customer should submit a Forfaiting Application Form and all supporting documents such as letter of assignment and SWIFT acceptance with authorized person signature.
3. BOCT makes a discounted payment upon completion of the above step.
4. BOCT transfers the net proceeds to the customer's account after deducting discount interest and any related fees.
5. On the maturity date, BOCT will inform the customer of the incoming funds and deducted foreign bank charges (if any).

Please refer to standard rates released by BOCT via: https://www.bankofchina.co.th/en-th/service/information/service-rates-and-tariffs/service-charges-for-export.html

1. Application for Export transaction financing
2. Letter of Assignment
3. Acceptance SWIFT from the issuing bank/nominated bank