Wednesday, 25 March 2015 20:26

Trade Finance

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BUYER'S CREDIT ADVANTAGES

  • Buyers credit helps local importers access to cheaper foreign funds close to LIBOR rates as against local sources of funding which are costly compared to LIBOR rate.(for example the rate of cash credit is between 11-15%)
  • Importer gets extended date for making an import payment as per the cash flows
  • The importer can deal with exporter on sight basis, negotiate a better discount and use the buyer's credit route to avail financing.
  • Further rollover of buyers credit can be done if the importer has short term liquidity problem
  • The funding currency can be in any FCY (USD, GBP, EURO, JPY etc.) depending on the choice of the customer.
  • The importer can use this financing for any form of trade viz. open account, collections, or LCs.

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