Financial Services

Pre-shipment finance

Pre-shipment finance includes any finance that an exporter can access before they send goods to a buyer. Once the business receives a confirmed order from a buyer, it has an obligation to deliver the finished goods. This may involve manufacturing or procurement, and working capital finance is often required to fund wages, production costs and buying raw materials. Exporters can access different types of working capital finance. The finance provider is likely to advance a certain percentage of the value of the order, potentially disbursed in stages as the order is fulfilled. Maturity dates for the financing are established between the seller and finance provider and are often tied to the ultimate date on which the buyer will make payment. Upon shipment, the finance provider may offer post-shipment financing using techniques such as Receivables Discounting, or Payables Finance to cover the period from shipment and the raising of the invoice until the final payment by the buyer