Electronic Trade Acceptance Draft
What is CIT's Electronic Trade Acceptance Draft?
CIT's Electronic Trade Acceptance Draft (E-TAD), is a negotiable electronic payment obligation issued by a buyer to their supplier, payable at a pre-determined future date and transferable through endorsement. It is a way of purchasing or importing goods that enables the buyer to negotiate longer payment terms while enabling the seller to be paid within 48 hours. CIT's patented payment and encoding process allows E-TAD to clear the banking networks, just like a check.
How does CIT's E-TAD work?
- Buyers and suppliers enroll electronically via a Web-based user interface.
- CIT reviews and approves the buyer credit information. Once approved, CIT establishes unsecured credit lines for the buyer.
- Upon acceptance of the goods, the buyer issues E-TADs to its supplier.
- The supplier assigns the E-TADs to CIT. CIT pays the supplier within 48 hours.
- Upon the E-TAD's maturity (i.e. 30 days, 60 days) CIT deposits the E-TAD, allowing CIT to draft against the buyer's bank account.
What types of companies can benefit from E-TADs?
- Manufacturers, wholesalers, importers, distributors with annual sales of $50 million or more
- Buyers in the U.S.
- Suppliers worldwide
What are the benefits for buyers?
E-TADs enable buyers to:- Extend payment terms
- Take advantage of early payment discounts
- Avoid drawing down bank lines
- Maintain or enhance liquidity
What are the benefits for sellers?
E-TADs enable sellers to:- Manage cash flow by ensuring guaranteed full payment on a specific date
- Offer extended payment terms to customers while offsetting payment risk to CIT
- Reduce need for borrowing by speeding up incoming payments
- Reduce late payments, partial payments, bad debt losses