Export agentHow exactly does advance funding work?

Export agentThe essence of cushion capital is supply chain financial services, and the operational process can be divided into three stages:

• Preparation phase:Sign a tripartite agreement (exporter, agent, overseas buyer) to confirm the payment method (commonly DP or OA).
• Execution phase:The agent advances 80-95% of the payment based on the bill of lading date, requiring the submission of a commercial invoice, packing list, and shipping documents.
• Settlement stage:The remaining balance will be settled after the buyer makes the payment, with the payment term typically controlled within 180 days.

The new policy in 2025 requires all advance payment businesses to be registered with the China International Trade Single Window. It is recommended to choose an agency company with AEO Advanced Certification qualification.

How should the financing costs be calculated reasonably?

The fee structure of a formal agency company consists of three parts:

• Basic service fee:Charged at 0.8%-1.5% of the cargo value (2025 industry average standard).
• Capital Usage Fee:Reference to the LPR rate with an upward adjustment of 2-4 basis points, currently annualized at approximately 5-7%.
• Risk premium:Adjust according to the buyer's credit rating (typically an additional 0.5% for BBB-rated enterprises).

Typical case: A Ningbo lighting exporter accepted a $500,000 DP 90-day order, with the calculation of advance funding costs as follows:

• Service fee: 500,000 × 1.2% = 6,000 USD
• Cost of funds: 500,000 × 6% × 90/360 = $7,500
• The total cost is approximately 2.7% (including risk premium).

How to prevent risks during the financing process?

According to the latest 2025 edition of the "Cross-Border Trade Financial Services Guidelines," a three-tier risk prevention and control approach is recommended:

• Prevention and control in advance:
  • Verify the buyer's creditworthiness (it is recommended to use Sinosure's credit report).
  • The requirement is no less than 30% advance payment.
• During - event monitoring:
  • Upload the logistics proof within 48 hours after the goods are shipped.
  • Using a blockchain bill of lading tracking system
• Post-incident handling:
  • Initiate the collection procedure after a 15-day overdue period.
  • Apply for export credit insurance (premium subsidy policy extended to 2025)

What should I do if the agency suddenly stops providing advance funding?

By 2025, multiple incidents caused byThe exchange rateFor cases of funding default caused by fluctuations, the following emergency measures are recommended:

• Activate the contingency plan immediately:Contact the registered alternative agencies (it is recommended to maintain at least 3 cooperative partners in reserve).
• Applying for Trade Financing:Supplement the funding gap through bank post-shipment financing products.
• Legal Remedy:Claim liquidated damages in accordance with the contract terms (standard contracts typically stipulate a penalty of 3-5%).

Typical Case: A Shenzhen-based electronics company, facing a capital chain rupture at its agency firm, activated its Sinosure insurance policy in advance and received a 70% compensation, effectively alleviating its cash flow pressure.

What are the special considerations for financing in emerging markets?

For emerging markets such as Southeast Asia and Africa, special attention is required in 2025:

• Foreign exchange control:Vietnam, Nigeria, and other countries implement a mandatory foreign exchange settlement system, so it is necessary to confirm the local clearing capability of the agency company.
• Documentation Requirements:Countries such as Egypt require consular authentication, while Indonesia demands the submission of SNI certification documents.
• Payment Method:It is recommended to adopt a combination of LC and advance payment, such as 50% LC + 50% advance payment.

Practical advice: When signing an agency agreement, be sure to clearly stipulate the cost-sharing mechanism for additional expenses arising from policy changes in the destination country.