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Export LC Financing ( Pre-Finance And Post Finance)
Posted: Tue Jan 07, 2014 1:34 pm
by Balan
Dear Experts,
Kindly provide me explanation on export LC financing (pre-finance and post finance)
Export pre finance and post finance
Posted: Wed Jan 08, 2014 1:16 pm
by thanhhabb
Balan wrote:Dear Experts,
Kindly provide me explanation on export LC financing (pre-finance and post finance)
Hi,
IMHO, in export LC financing, pre-finance means pre shipment finance, banks may offer credit facility with favorable interst rate for exporters to purchase or import raw materials, then manufacture, pack and store goods to prepare for shipment.
Post finance means post shipment finance, banks may negotiate/discount for export docs under LC at sight or prepay for accepted drafts/docs, advance funds against export bills on colection basis.
Regards,
Before or after the exportation
Posted: Fri Jan 10, 2014 3:42 pm
by jcduarte
Hello,
If exporter gets money from bank for manufactoring goods, purchase raw materials, etc, then this is a pre-finance. Once goods have been sent to importer and exporter needs to advance funds then they get a post finance.
Regards