Overview
The Financing under Repurchase Guarantee refers to a package of financial services where ABC provides credit support to the buyer for the purpose of purchasing products from the supplier, while the supplier undertakes to repurchase such products from the buyer and use the proceeds to repay ABC in case the buyer is unable to repay the debts timely.
This product is based on the precondition that the supplier is obliged to repurchase the products and therefore repurchase guarantee can be understood as a conditional guarantee for the benefits of ABC.
Financing services under repurchase guarantee available at ABC mainly include confirmed warehouse receipt financing business, auto finance service network, and bulk electromechanical equipment procurement financing.
Features
This service enables the buyer to purchase bulk goods with fewer funds and therefore enjoy the benefits of leverage. It is especially suitable for companies with small capital bases but sound prospects. At the same time, it enables the suppliers to expand sales and expedite the capitalization of products.
Procedures
1. ABC, the supplier and the distributor (buyer) sign a three-party agreement.
2. The distributor makes the security deposit with ABC.
3. ABC issues bank acceptance bills or grants loans to pay for the products.
4. The supplier delivers products to the distributor.
5. The distributor repays the debts to ABC as agreed.
6. The repurchase process is activated if the distributor fails to perform its obligation of repayment.
7. The distributor delivers the products to the supplier.
8. The supplier transfers the proceeds from repurchase to ABC for repayment of the distributor's debts.
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