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Questions
Questions about Export–Import Finance
Plain answers to common questions on this service, grouped by what you are trying to find out. Each answer starts with the direct reply.
Basics
- What is a bill purchase facility for export documents and how does it work?A bill purchase facility lets an exporter get funds from the bank soon after shipment by handing over export documents, before the buyer pays.
- What is a bill of lading and why does the bank care about it?A bill of lading is the carrier's receipt and title document for goods at sea. Banks rely on it as evidence of shipment and, often, control of the cargo.
- What is a status report on an overseas buyer and why might a bank ask for one?A status report is an independent check on a foreign buyer's identity, standing and payment record. Banks ask for one before financing exports to that buyer.
Eligibility & documents
- What documents does a bank ask for before sanctioning packing credit?Banks usually want proof of identity, trade registration, export orders and financial records before sanctioning packing credit. A practical checklist.
- Can I get finance against export incentives that are due from the government?Some lenders consider funding against export incentives and refunds that are owed, but policy, proof and timing vary. See what they usually look for.
- Do I need an Importer Exporter Code before applying for trade finance?Banks normally expect an Importer Exporter Code for export and import finance, along with a few other registrations. Here is what to set up first.
Process
- How do I finance imports of raw material from overseas suppliers?Manufacturers can fund imports through letters of credit, supplier credit, buyer credit or working capital, each with different cost and currency risk.
- How do I choose an authorised dealer bank for my trade transactions?Beyond price, look at trade desk capability, document handling speed, correspondent reach and relationship support when you pick a bank for trade work.
Choosing & comparing
- What is the difference between a clean bill and a documentary bill in exports?A clean bill carries only a payment demand, while a documentary bill carries the shipping papers too. That changes who controls the goods and the bank's risk.
- What is the difference between buyer credit and supplier credit for imports?In supplier credit the overseas seller waits for payment; in buyer credit an overseas lender pays the seller and you repay the lender later.
- What is the difference between documents against payment and documents against acceptance?Under payment terms the buyer must pay to get the shipping documents; under acceptance terms the buyer only promises to pay later. The risk differs sharply.
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