ORIX :: Products & Services :: Confirming Facility

Products & Services: Confirming Facility
ORIX Factoring Malaysia Sdn. Bhd.


	Confirming facility is a facility designed to assist a business organization in financing its overseas purchases. It is a common business practice that overseas supplier would require a Letter of Credit (LC) when a buyer places an order for goods.

The Benefits

	Additional source of working capital.
	Buyer does not have to pay the seller until the latter has fulfilled his obligation.
	Flexible credit terms tailored to buyer's requirements.
	Negotiate trade discounts from suppliers.

Why ORIX?

	An alternative to traditional bank lines.
	Competitive terms tailored to your requirements.
	A comprehensive product range.
	Dedicated professional staff who are keen to understand your business needs.
	Prompt, personal service.
	Fast approval.

We will arrange the Letter of Credit (LC) on your behalf to your overseas supplier and may grant a repayment period for you to settle the LC amount.

MECHANICS
The following is a simple illustration on how Confirming basically works.

The buyer and Seller concludes sales contract for payment by documentary credit (LC).
The buyer approaches ORIX Factoring Malaysia for Confirming Facility.
ORIX Factoring Malaysia instructs the bank (issuing bank) to issue a credit in favor of the seller (also known as the beneficiary).
The issuing bank in turn asks another bank, usually in the country of the seller, to advise or confirm the credit.
If the advising bank does not wish to confirm the credit, they will approach another bank to do so.
Either the advising or confirming bank informs the seller that the credit has been issued.

What are the charges involved for confirming?
In addition to normal bank charges for issuance of LC, a Confirming Commission is charged for every LC issued based on the LC amount. If a repayment period is required by you to settle the LC amount, Interest on chargeable items (similar to a Trust Receipt charged by bankers) will be charged.

Is security required?
Depends on your credit standing. Usually directors or shareholders' personal guarantees and some marginal deposit, in the form of an advance cash payment or a Bank Guarantee are required.

How can Confirming be useful to me?
Confirming can be regarded as a source of additional working capital especially if your company is in the midst of expansion or there are increased or expected increase in orders and hence Confirming can actually complement your existing banking facilities.

How to apply

Contact ORIX Factoring Malaysia and complete the application form
- Download the application form

PDF format (524kb) /

Word format (258kb)
- Fill in the application form and fax it over
to 03-2144 1840

* Required Adobe Acrobat Reader.