To mitigate payment and country risk on open account transaction
- ①Your Company (Supplier) enters into a sales & purchase contract with Buyer
- ②Your company requests a payment guarantee application to SMBC along-with an undated notice of assignment, to cover against risk of non-payment of the Buyer.
- ③SMBC provides such guarantee (silent to Buyer) with applicable fees.
- ④Your company ships the goods.
- ⑤Either one of below happens:
- A)Buyer pays your company on invoice due date. Transaction ends here.
- B)Buyer fails to pay your company on invoice due date.
- ⑥Your company claims the payment guarantee with relevant evidence and as part of claim process assigns its rights on sales proceeds to SMBC. The perfection procedure for this assignment will be completed as per relevant regulations.
- ⑦SMBC pays agreed amount to your co.
- ⑧Buyer pays to SMBC as the transferee of the receivables.
- ・Assurance of payment covering risk of non-payment from Buyer
- ・Buyer is unaware of such guarantee unless there is payment default from Buyer