Pre Shipment Finance is funding provided to exporters before shipment to support production, procurement, and processing of goods.
How It Works:
- The exporter receives a confirmed order.
- The exporter applies for finance.
- Funds are disbursed for production or procurement.
- Goods are manufactured and shipped.
- The loan is repaid after receiving payment.
Benefits:
- Ensures timely execution of export orders through adequate working capital support
- Strengthens procurement and production capabilities
- Reduces financial strain during the manufacturing cycle
- Enhances competitiveness by enabling larger order fulfillment
Example:
An exporter receives funding to manufacture goods for an international order.