pre export financing

pre export financing

One of the crucial reasons for adopting pre export financing is that the borrower will get access to sufficient liquidity for maximising the company’s production.

Before providing finance to the exporter, finance provider will have to consider a number of factors such as production and risk of delivery of products. The repayment of the borrowed fund is contingent on the efficient production as well as sale of goods. Payment risk is one of the major issues within which the seller distributes the consignment as per the decided tenor but the importer fails to pay in full on time.

Eligibility: Pre shipment finance is available to all types of exporters

such as:

● Merchant exporters;

● Manufacturer exporters;

● Export and Trading houses:

● Manufacturers who supply goods to export houses trading houses  or merchant exporters.

Pre export finance is considered as an established structure which is used for providing finance to producers of commodities. In pre export finance, finance provider provides funds to exporter for the producers for assisting them to cope up with their working capital requirements.