Post Shipment Finance

1. Post shipment is a finance extended by the bank after effective shipment to bridge the gap. Post shipment finance is required because at the Pre-shipment stage exporter gets only 60-80%. So balance amount need to be released to him after shipment.
2. BASIS It is always extended against the evidence of shipment of export goods or supplies made to the designated agencies
3. PURPOSE It is meant for financial Export sales receivables after the date of shipment of goods of the trade of realisation of export proceeds
4. QUANTUM It can be extended by 100% of invoice value of goods.
5. Generally exporters who have availed Packing Credit need finance to clear the packing credit availed. This can be done by availing the Post Shipment Finance from the lending institutes or banks. This advance or finance is made available by the lending institutes or banks in the form of Export bill discounting facility on raising bills along with the shipping documents and according to the terms and conditions of the L/C issued in favor of the exporter.
6. The usage period generally is between 90 to 180 days starting with the date of shipment. Seller's Credit (extended to exporter) or Buyer's Credit (Overseas Buyer) is the two options available under post shipment finance.

It is a most preferred method to finance or fund the Export Receivables