In this article, our experts have provided a brief explanation on the different aspects of export finance.
An export transaction can be defined as a contractual exchange involving goods for money between parties who are in two different countries. An exporter may require short term, medium term or long term finance depending upon the types of goods to be exported.
Export finance can be classified into the following two categories:
- Pre-shipment finance; and
- Post-shipment finance.
Pre-shipment finance is the provision of finance to assist the exporter from the date of receipt of the export order until the date of shipment of goods. This can also be known as pre-shipment credit. This financing is provided to an exporter for the purposes of purchasing raw materials, manufacturing, processing, packing, transporting and warehousing the goods meant for export under the export order. Finance is provided until shipment, being the point at which the goods being exported are paid for.
Post-shipment finance is the provision of finance to the exporter from the date of shipment of the export goods until the goods are paid for. This can also be known as post-shipment credit. This financing is provided to an exporter to meet working capital requirements after the actual shipment of goods. It bridges the financial gap between the date of shipment and the actual receipt of payment from the overseas buyer under the export order.
Please contact one of our friendly expert trade and export finance solicitors now for your trade and export finance consultation. At Francis Wilks & Jones, we have a team of dedicated trade and export finance experts ready to take your call and help you with all your queries on trade and export finance. Whatever your trade and export finance question, we can help you.