Pre export finance
Pre export finance Pre-export finance is the finance required by an exporter before the shipment of goods. Pre-export finance provides the exporter with working capital required for funding of wages, production cost, buying raw materials, processing and converting into finished goods and packaging. Pre-export credit is extended under the concessional rates of interest at 7.5 per cent, to a maximum period of six months. Pre-export financing is the buyer taking out a loan specifically to pay the seller in advance of the shipment of the goods. According to the borrowing contract, the buyer is liable to pay the loan back to the bank soon after receiving payment of the goods. While pre-export financing ensures quick payment, the risk of losses in such finance is only shared by the buyer and the lender.