Finance for Importers
Import Finance:
Import Letter of Credit: Importers get LC limits sanctioned from his bank & establish LC on DA basis, thereby getting credit from overseas suppliers.
Import Loan: it is granted against imported raw material or goods meant for trading. Loan is sanctioned against pledge of goods or hypothecation to financing bank.
Buyer’s Credit: Credit arrangement by importer from a bank outside his country, to settle the payment of imports. This credit is for 1 year.
Seller’s Credit: it is directly extended by overseas suppliers of goods to importers. The exporter may avail finance against the bills after making shipment from his banker & bank would receive funds on maturity date. The maximum period is 6 months.
Trade Credit: credit is extended for more than 6 months from date of shipment, up to 3 years.
ECB: any credit which is extended for 3 years or more is External Commercial Borrowing.