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Post Shipment Finance 
Post-shipment finance is a loan or advance granted by a bank to an exporter of goods from India. This facility is available to an exporter subsequent to the date of shipment of goods up to the date of realization of export proceeds.
Some key features of post-shipment finance are as follows:
- Finance is extended to either the exporter (seller's credit) or the overseas buyer of the goods (buyer's credit).
- Finance is extended against evidence of shipping documents.
- Concessive rate of interest is available for a maximum period of 180 days, starting from the date of submission of documents. Normally, the documents are to be submitted within 21days from the date of shipment.
Post-shipment finance can be further classified as under:
- Negotiation of export documents under Letter of Credit (LC).
- Purchase / Discount of export document under confirmed orders / export contracts, etc.
- Advances against export bills sent on collection basis.
- Who is eligible for post-shipment finance?
Post-shipment finance is extended to the actual exporter who has exported the goods or to an exporter in whose name the export documents are transferred.
- On what basis is post-shipment finance extended?
It is extended against evidence of shipment of export goods.
- What is the purpose of post-shipment finance?
Post shipment finance is meant to finance export receivables.
- What is the quantum of this finance?
Post shipment finance can be extended up to 100% of the invoice value of goods.
- What is the period for which this funding is available?
In the case of routine exports, the maximum period allowed for realisation of export proceeds is 6 months from the date of shipment. Banks can extend post shipment finance at a lower interest rate upto the normal transit period or the notional due dates (this is calculated as the sum of the Normal Transit Period + Usance Period, subject to a maximum of 180 days). Beyond that period, banks lend at non-concessive rates or the normal commercial rates.