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Packing Credit
Why is this type of finance right for you?
- Gives you working capital to fulfill orders
- Covers all pre-shipment costs
- Lower interest rates than traditional overdrafts
Other benefits
- You have an extended, flexible finance period – usually 90 days before the shipment date
- The credit covers manufacturing costs such as raw materials and employee wages
- Supports cash flow while goods are being packed and waiting for shipment
- Simple pro-rata repayment from Documentary Credit proceeds or buyer remittance
- Credit terms can be structured to suit your business
- You can win new business by offering more competitive terms to trading partner
This facility is sanctioned to an exporter in the Pre-Shipment stage to purchase raw materials at competitive rates and manufacture or produce goods according to the requirement of the buyer and organize to have it packed for onward export. The bank seek a Letter of Credit opened in favor of the exporter from the overseas buyer along with the irrevocable (cannot be canceled once drawn) Purchase Order favoring the exporter.
Packing Credit facility covers all the working capital needs of the exporter including raw materials, wages, packing costs and all pre-shipment costs. It is generally available for a period of 90 days and the exporter has to pay lower rate of interest compared to traditional Overdraft or Cash Credit facility. Exporters use this facility so they can bid the most competitive price for export thus gaining more business opportunities for export.