Paragon Financial Group is funding during the COVID-19 crisis.

Cash Against Documents Funding

Low-Cost Import Financing with Cash Against Documents | Documentary Collections

Cash Against Documents funding, documentary collections, or Documents Against Payment (D/P) is a robust form of cash on delivery (COD). Everyday merchandise is exported from China and other foreign countries to the US.

The US importer must pay the invoice in full or arrange Cash Against Documents Financing before taking possession of the goods-either FOB China or the US. The process is fairly straightforward, and the exporter will fill the order and ship it if they have been prepaid or they know they will get paid if they live up to the terms of the purchase order.

What is FOB or Free On Board?

A free on board is when an exporter from China offers to sell you t-shirts. The exporter may offer the purchaser (importer) $5 a shirt if they buy FOB China. Meaning, the seller (exporter) has the funds transferred before shipping them and paying for the merchandise and shipping costs sight unseen. However, the items may be subject for quality and quantity inspection.

In another scenario, the exporter offers the purchaser the ability to buy the t-shirts FOB Miami for $12 a shirt. Meaning, the purchaser may physically inspect the goods before transferring the money. Also, the seller has paid the shipping, import duties, and other costs.

Experienced logistics consultants can help you weigh the risks. These risks include the credibility of the exporter, the quality of merchandise or the speed of delivery. Paragon has deep experience versus other banks and financing companies who may not have the same history with this type of transaction.

Low Cost Import Financing with Cash Against Documents | Documentary Collections

Low-Cost Import Financing with Cash Against Documents | Documentary Collections

The Process of Cash Against Documents

Decide on the type of transaction and have the exporter prepare the necessary paperwork. Exporters will need a Bill of Exchange, manifest, inspection certificates, proof of tariff payment and other required documents. Next, these documents are sent to the exporter’s bank or finance company. At that time, the exporter’s bank will send the documents to the purchaser’s finance company for review.

During this process, the exporter retains ownership of all goods subject for export. The process will only be completed when the payment is made in full. Once the payment has been made and verified by the bank, the appropriate documents are released to the purchaser. Fees are commonly associated with these types of transactions. Payment will be by either the exporter, importer or sometimes split between both.

Paragon Financial provides Cash Against Docs Financing or Documentary Collections for your import business. Not only can we help with financing, but Paragon Financial has a wealth of import/trade knowledge that we bring to the table. There is a greater chance that a mistake will occur when using a bank without trade finance experience instead of a funding company that deals with these transactions on a daily basis.

To discuss your specific Import Financing needs, please contact President, Daniel Rodrigue via email or call him at 888-400-5931 ext 1.

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