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Export Packing Loan

Packing loan under export L/C refers to the short-term RMB working capital loan granted by SRCB to exporter (borrower), whereby the source of repayment is the expected proceeds under the L/C issued by the importer’s bank. The loan is mainly used to funding the exporter’s production activities (such as purchasing of raw materials, production and transportation, etc) before the shipment.


  • This gives exporter the facility to proceed with purchasing, stocking, processing even if they don’t have sufficient liquidity, which ensures performance of the contract.
  • Application for the loan is relatively simple, the prerequisite is receipt of valid L/C.

Target customers

Export companies who have sound settlement and credit record at SRCB, and use L/C for settlement.

Application process

1.    Customers apply for trade finance credit facility with SRCB. On receipt of the L/C, submit to SRCB for retain.

2.    Customers submit Packing Loan application form, and supporting trade documents.

3.    SRCB review the L/C and trade background.

4.    SRCB sign legal contract (ie. Export Packing Loan Contract) with the customers.

5.    SRCB grant loan to the customer.

Case study

Textile Company C is an exporter of cashmere clothing. C is negotiating with a Japanese client J on a cashmere sweater export contract worth USD 1 million. C would like to get some prepayment to fund the purchasing and production. Meanwhile, J insists on 90 days cash on delivery. C and J can not reach an agreement on the settlement. To resolve this issue, SRCB designs a trade financing solution for C. SRCB suggests C to require J to use L/C for settlement. Upon receipt of the valid L/C, SRCB will provide C with packing loan.

Based on SRCB’s suggestion, C entered a commercial contract with J, which specifies 90 days L/C for settlement. After SRCB has received and review the L/C, SRCB grants 80% of the L/C value to C as packing loan, which meets C’s funding needs for purchasing and production.


SRCB’s suggestion brings with two major benefits to Company C. On the one hand, C can effectively mitigate commercial risks (such as default risks) through L/C settlement. On the other hand, the packing loan relieves C’s pressure on funds and improves its financial situation. When the exporter is delivering the documents, if it is looking for cutting down financing cost, obtaining more funding or mitigating FX movement risks, it can apply for replacing the packing loan with export bill purchasing at SRCB.
at SRCB.

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