Pre-Shipment Financing covers the working-capital requirement of the seller, including procurement of raw materials, labor, packing costs, and other pre-shipment expenses to allow the seller to fulfill delivery to its buyer(s).
Who gets benefited?
The firm, who is looking for capital to cover its working capital requirements before exporting the items.
How to book this and what is the process?
Book your appointment to discuss this with us. We will analyze your financials. The success fee is based on the success of the transaction and the marketing fee has to be paid to get the financiers in hand. We will sign the NDA and Mandate after agreeing on the terms.
Benefits of Pre-shipment finance
- Firms receive funds in advance that can be used to fund working capital needs.
- Firms have either an Export Order or a Letter of Credit to support the customer’s application making the cost of financing invariably cheaper than an overdraft.
- With the lower cost of financing, exporter competitiveness is improved.
- The credit facility helps firms to easily plan out their expenses and income in local currency (INR) by using PCFC as a potential instrument towards hedging currency risks. This advantage is however applicable when credit is provided in foreign currency.
What do we do?
Pre-shipment Finance can be provided in any number of structural variations. Here at SHS Advisory group, we practice different strategies to reach potential financiers. We will fix an appointment with you to understand your needs and requirements. We will analyze your statements and convey the same to the financiers. Terms and conditions will be discussed at the time the deal is placed.