Bizolot
Post-Shipment Finance
Enabling seamless international trade and sustained growth.
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Post-Shipment Finance: Streamlining Global Trade with Bizolot
Expanding into international markets is an exciting opportunity for businesses, but it comes with challenges, particularly in managing finances during logistics and shipping. Post-shipment finance is a critical solution that ensures smooth business operations after goods have been dispatched.
What is Post-Shipment Finance?
Post-shipment finance provides financial support to exporters after shipping goods, bridging the gap until payment is received from importers. This ensures exporters can maintain healthy cash flow and meet their working capital needs during the waiting period, which can range from days to months depending on trade agreements, shipping distances, and customs processes.
Why is Post-Shipment Finance Necessary?
Exporters face financial pressures when awaiting payment after shipping goods. Post-shipment finance alleviates these challenges by offering immediate funds to cover:
✔Supplier payments
✔Employee wages
✔Operational expenses
By reducing financial strain, post-shipment finance supports exporters in maintaining business continuity and focusing on growth.
Types of Post-Shipment Finance
Export Bills Purchased/Discounted (DP and DA Bills)
- DP Bills: Funds are provided upon presentation of documents to the importer.
- DA Bills: Payment is accessed at a future date as agreed upon between exporter and importer.
Export Bills Negotiated (Bills under Letter of Credit)
- Financing based on bills of exchange drawn under a Letter of Credit (L/C), ensuring quick access to funds.
Advance Against Export Bills Sent on Collection Basis
- Exporters receive advances against bills sent for collection, with funds released after the importer’s payment is confirmed.
Advance Against Export on Consignment Basis
- Suitable for consignment-based exports, where ownership remains with the exporter until the goods are sold.
Where to Access Post-Shipment Credit
Banks
Commercial banks offer tailored solutions, including export bill discounting and post-shipment credit loans.
Export Credit Agencies (ECAs)
Government-backed agencies provide credit guarantees and insurance to mitigate payment risks in international trade.
Specialized Finance Providers
These institutions focus exclusively on exporters’ needs, offering competitive rates and expertise in trade finance.
Online Trade Finance Platforms
Digital platforms connect exporters with banks, lenders, and investors, offering diverse and accessible financing options.
Eligibility for Post-Shipment Finance
Exporters must meet specific criteria to qualify for post-shipment finance:
✔Track Record: Proven experience and reputation in international trade.
✔Creditworthiness: Stable financial position and good credit history.
✔Documentation: Accurate trade documents such as invoices, shipping records, and contracts.
✔Regulatory Compliance: Adherence to legal and international trade regulations.
✔Institutional Relationships: Positive history with financial institutions can improve eligibility.
Required Documents
Exporters typically need to provide the following when applying for post-shipment finance:
✔Invoice: Details of goods sold, including description and value.
✔Shipping Documents: Bill of Lading or Air Waybill, along with a packing list.
✔Export Contract: Outlines payment terms, delivery details, and other agreements.
✔Insurance Documents: Proof of coverage against trade risks.
✔Export Licenses/Permits: As applicable for specific goods or destinations.
Key Considerations for Finance Amount
✔Working Capital Needs: Immediate financial obligations determine the amount.
✔Percentage of Invoice Value: Based on institution-specific terms.
✔Credit Assessment: Exporter's stability and transaction risk profile are evaluated.
✔Credit Limits: Maximum finance amount defined by the institution.
Benefits of Post-Shipment Finance
✔Improved Cash Flow: Access immediate funds while awaiting importer payments.
✔Risk Mitigation: Safeguard against delays, defaults, or trade risks.
✔Growth Enablement: Take on larger orders and explore new markets.
✔Operational Continuity: Meet obligations without financial disruptions.
✔E-Commerce Synergy: Enables exporters to scale operations globally without establishing warehouses or stores abroad.
Bizolot: Supporting Exporters Every Step of the Way
At Bizolot, we empower exporters to overcome financial barriers in international trade. Whether you're shipping traditional goods or exploring e-commerce opportunities, our platform offers tools, insights, and connections to streamline your post-shipment finance journey.