Documentary Collections

Do You...

Engage in an import/export business?
Wish to minimize the risk of dealing on open account terms?
Want to have a certain degree of control over the goods?
Want to reduce your import costs and credit constraints?
....then consider CIBC Trade Finance Documentary Collections.

What Are Documentary Collections?

In Documentary Collections, after shipping the goods, the documents (including a bill of exchange*) are forwarded by the seller to the buyer's bank with instructions to deliver the documents to the buyer after collecting payment (or on a promise to pay on a specified date). Documentary collections provide an alternative payment arrangement to cash in advance or open account terms**.

* The Canadian "Bill of Exchange Act" defines a bill of exchange as follows: A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay, on demand or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person, or to bearer. The terms "bill of exchange" and "draft" are used interchangeably.

** Open account term is defined as follows: The seller sends the documents covering the goods directly to the buyer who then takes possession and title of the goods before paying for them. Here, the seller is at risk of having turned over the title to the goods before receiving payment from the buyer. This form of trade implies complete faith on the part of the seller that the buyer will pay at the agreed future time.

Key Benefits

Saves You Money

Reduce your operating costs when established buyer / supplier relationships do not necessitate the use of documentary letters of credit
Simple process not involving a line of credit

Makes You Money

Do more business without using your line of credit

Saves You Time

CIBC Trade Finance tracks the transaction status of your Documentary Collections

Convenient

Credit approval not required
Once the buyer/importer agrees to the terms of the collection, documents are released to the buyer/importer and goods can be cleared through customs

Please Note: Products and their features may change at any time. This is a general description only; for more information call the CIBC Trade Finance Help Desk at 1 800 268-6331.

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