Is Refund Advance a Scheme of Getting Something for Nothing? The Cash Flow Magic of Seasoned Foreign Trade Professionals

Mr. Zhang recently received an order worth $2 million. He should have been happy, but he was frowning - the customer required a 90-day payment term, while the payment to the factory had to be settled within 30 days. The 60-day capital gap almost made the duck that was about to be caught fly away. It was not until he learned about the export agency refund advance service that he solved the urgent problem. Today, we will uncover this financial tool that allows foreign trade enterprises to "generate money out of thin air".

So-called refund advance means that the agency company advances the tax refund to the export enterprise in advance. Under normal circumstances, it takes 2 - 3 months for an enterprise to obtain the tax refund from the time of customs declaration. However, through professional institutions such as Zhongshitong, the enterprise can get 80% - 90% of the tax refund amount in as fast as 3 working days. This is equivalent to turning the cash flow that can only be realized in the future into available funds in advance.

• 300% improvement in capital turnover rate: An enterprise with an annual export volume of $5 million can release about $400,000 in working capital through refund advance
• Exchange rate risk hedging: Settle foreign exchange in advance to avoid losses caused by exchange rate fluctuations
• Enhanced supply chain stability: Ensure timely payment of raw material payments

Ms. Li was initially worried about the risks of refund advance, but the risk control system of professional agencies dispelled her concerns:

• The first layer: Comparison of the customs declaration form, VAT invoice and foreign exchange receipt slip ("three - document comparison")
• The second layer: Insure accounts receivable with China Credit Insurance
• The third layer: Special - purpose funds in a bank - supervised account

Some institutions in the market claim to be free of service fees, but in fact, they make profits in disguise through exchange rate differences or fund occupation fees. Regular agencies such as Zhongshitong will clearly publicize:

• The service fee is usually 0.8% - 1.2% of the tax refund amount
• The advance capital interest rate is 15% - 20% above the LPR benchmark
• No hidden charges

When the following signals appear, it's time to consider this service:

• The annual export volume exceeds 2 million RMB
• The payment term difference exceeds 45 days
• There is a continuous and stable export business