Packing Credit
Packing Credit
What is Packing credit
Packing credit is the most commonly used trade finance tool by an exporter. Packing credit or pre-shipment finance is very useful to small and medium enterprises for their financing needs.
Packing credit / Pre-shipment is basically a loan or advance granted to exporters or sellers for financing the purchase, processing, manufacturing or packing of goods prior to shipment. Packing credit is disbursed against the letter of credit issued favoring the seller and a confirmed order for selling the goods or services.
Features of Packing Credit
- Self-liquidating
- Credit to buy goods
- Covers manufacturing expenses
- A lower rate of interest
- Flexible terms of credit
Advantages of packing credit
- Easy repayment.
- Funds for entire process.
- Available for service providers too.
- Covers Manufacturing cost.
- Flexible credit term.
- Lower interest rate.
Eligibility Criteria
- An existing customer already availing credit facilitates
- New units
- The takeover of existing units from other banks/ FIs with a satisfactory track record.