Super User

Super User

Tuesday, 13 March 2018 07:05

Suppliers Credit

Suppliers Credit

Supplier’s credit is mostly used when the seller demands payment at sight. Supplier’s Credit allows the buyers to deal with seller on sight basis term which allows them to negotiate for better discounts to acquire goods at better prices. At the same time, it’s beneficial for the seller too, as they get the payment immediately after shipment of goods (Upon acceptance by Buyer’s Bank to make the payment)

Typically, it is used for CAPEX imports where banks would restrict clients to use only fund based limits(Term Loans) which is far expensive than Supplier’s credit. By availing Supplier’s credit, Buyer gets access to cheaper source of funds(LIBOR Based).

 

Call 9228070610 or mail your SC queries to This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Suppliers Credit Process Flowsupplierscreditchart

 

 

Benefits of Suppliers Credit:

For Importer

  • Availability of cheaper funds for import of raw materials and capital goods
  • Ease short-term fund pressure as able to get credit
  • Ability to negotiate better price with suppliers
  • Able to meet the Suppliers requirement of payment at sight

For Supplier

  • Realize at-sight payment
  • Avoid the risk of importer’s credit by making settlement with LC
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