A Documentary Credit is an undertaking by a bank to pay a supplier for goods or services within a prescribed time limit as long as clearly defined terms and conditions have been met. There are benefits for an importer:

• Protects both buyer and suppliers’ interest
• Can improve company cash flow
• Can be used to increase the credit period which the supplier is willing to give
• Can be used in place of deposits and advances financed by import loans, overdraft or your own cash reserves

Having shipped the goods, your supplier presents the necessary documents, together with their instructions, to their bank which forwards the documents to your bank for payment. With a Documentary Collection against payment (D/P), import documents are released to you on payment. With a Documentary Collection against acceptance (D/A), the documents are released to you against your promise to pay

• A simpler alternative to Documentary Credits
• Reduces payment risk for your supplier at minimal cost to you
• Gives you access to goods without delay
• Suppliers are paid as soon as your account is debited with no hidden interest or payment delays

• Timely payments to suppliers will enhance your business reputation
• You can extend your credit period beyond those given under Documentary Credits and Documentary Collections
• Your negotiating position with suppliers is strengthened as you’re able to accept quick payment terms
• A choice of two types of Import Loan：

  Clean Import Loan for non DC– available when you’re purchasing goods under an Open Account term. The payment will be made by the bank to your suppliers directly.

  Clean Import Loan– rather than being triggered by the receipt of a Documentary Credit or Documentary Collection, the advance is made on presentation of supplier invoices and evidence of shipment only

• Defers payment until your supplier's documents have been presented
• Shipping guarantees issued by HSBC are widely accepted by all shipping companies
• A shipping guarantee can be issued as soon as you make the application

• Allow you to provide a credit term to buyer with secure of your proceeds
• Allows you to reinvest sales proceeds immediately
• Proceeds from Export DC Negotiation can be used to settle packing credits or import loans

• Protects your interests if your buyer does not issue Documentary Credits (DCs)
• Simple and cost effective
• Documents and payment collections are handled on your behalf
• It's easier and cheaper for buyers to receive Documentary Collections than to issue DCs
• Reduces disputes as Documentary Collections are governed by URC522 which clearly defines the responsibilities of different parties, along with interest and expense issues
• Access to HSBC's international network makes it easier to chase outstanding payments

• Easy to apply for – simply submit your invoice and a copy of the shipping documents
• Low handling charges and straightforward settlement
• No missed business opportunities where buyers require long credit periods
• An export loan is not secured by the exported goods
• Structured to ensure your trade cycle is financed adequately

Financing is the core element of the receivable finance services. HSBC provides eight types of financing facilities to clients when needed.