Features and benefits of export finance
-
Need-based financing
Get a loan amount based on your needs to conveniently purchase raw materials required for manufacturing export goods.
-
Nominal paperwork
Borrow funds with ease against a confirmed export order, letter of credit or agreement with applicable terms mentioned.
-
Immediate disbursal
Avail of finances immediately after providing the required documents and meeting simple eligibility criteria.
-
Credit flexibility
Get funds in rupees or foreign currency against customised export orders for a suitable period based on payment terms.
-
Attractive interest rate
Packing credit interest rates are more affordable than most other loans to support businesses like yours.
-
Repay with export proceeds
Choose a comfortable repayment tenure based on specific requirements such as your manufacturing or trade cycle in up to 96 months.
-
Address obligations with ease
Convert your pre-shipment obligation to liability and repay once goods are shipped to manage your finances better.
-
For all types of borrowers
Both merchants involved in export and businesspersons manufacturing export goods can avail of our packing credit advance.
As an exporter, you may require funds to procure raw materials to produce finished goods before sending your shipment across borders. Our packing credit facility supports you with the finances you need to manufacture goods for export. You can avail export finance to meet varying working capital needs like purchasing and processing raw materials, manufacturing, warehousing, transportation, or packing goods required for shipping.
We offer this loan at competitive interest rates to ensure exporters can avail the necessary funds to complete orders. Export packing credit reduces any chances of missing out on available trade opportunities and helps your business grow to meet larger demands with ease. This is essential from the working capital perspective as the buyers are often reluctant to make advance payments to exporters.
Get attractive features with our export credit facility and easily repay over a suitable tenure. Remember that our calculation for export packing credit limit is based on the agreement document.
Eligibility criteria for export packing credit
To avail of export packing credit, a business must have the following:
- An import export code (IEC) issued by the regional office of DGFT (director general of foreign Trade)
- A confirmed export order or a letter of credit
NOTE: Our credit facility is available to exporters dealing with items listed under freely exportable goods. If the items to be exported fall under the negative list, you must acquire a licence to export such goods.
What is export finance?
Export finance is a term that covers various forms of financial products and services that help businesses to fund their export activities. Export finance can help businesses to overcome the challenges and risks of international trade, such as currency fluctuations, payment delays, political instability, and transportation costs.
Why is export finance necessary?
Export finance is necessary for businesses that want to expand their market and sell their products or services to foreign buyers. Export finance can help businesses to:
- Cover the immediate expenses and cash flow gaps that arise from exporting, such as production, packaging, transportation, and insurance costs.
- Provide competitive terms of payment to their buyers, such as deferred payment or credit terms.
- Mitigate some of the financial risks involved with international trade, such as currency fluctuations, payment delays, political instability, and default by the buyer.
Export finance can also support economic growth and development by facilitating trade flows and creating jobs. Export finance can help businesses to access new markets, diversify their risks, improve their competitiveness, and increase their profits. Export finance can also contribute to the global economy by enhancing trade relations, fostering innovation, and promoting sustainability.
Asked frequently questions
Export finance is the provision of financial products and services to support export activities. Some types of export finance are pre-shipment, post-shipment, supply chain, and trade credit insurance.
Export financing is when a lender provides funds to an exporter before or after shipment. For example, packing credit or invoice factoring.
Export financing is when an exporter receives financial support from a bank or other institution to facilitate their export activities. For example, export credit insurance or letters of credit.
Export financing is when an exporter obtains various financial products and services to manage the risks and costs of exporting. For example, export loans or trade finance services.
Some of the advantages of export finance for exporters are:
- Provides access a global market of buyers and increase their sales and profits.
- Mitigate the risks of non-payment, currency fluctuations, and political disruptions in foreign markets.
- Improve their cash flow and working capital by bridging the gap between shipment and payment.
- Achieve economies of scale and enhance their competitiveness and market share.
- Benefit from government support and incentives for exporting.
The two stages of export finance are pre-shipment finance and post-shipment finance. Pre-shipment finance is the funding provided to the exporter before the shipment of goods, while post-shipment finance is the funding provided to the exporter after the shipment of goods.
Export finance is a type of financing that helps businesses get funding for exporting goods and services. In simple terms, it provides businesses with the necessary financial resources to help facilitate trade and international transactions.
