1 / 5

What Are The Types Of Trade Finance

The Indian government established the EPCG Scheme to ease the process of importing capital goods and machinery to increase the production of goods and services. EP License is a type of export promotion license.

dgftguru
Download Presentation

What Are The Types Of Trade Finance

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. WHAT ARE THE TYPES OF TRADE FINANCE? PRESENTED BY DGFT GURU www.dgftguru.com

  2. INDIA'S TRADE FINANCE OPTIONS Trade finance is not like traditional product or service financing in either nature or intent. Therefore, trade finance solutions are not the same as other types of financing. Here are some examples of standard trade financing options in India: Term Borrowings Cash Credit and Overdraft Facilities, as well as Other Sources of Working Capital LCs, or Letters of Credit Discounting or factoring of invoices Credit for Exports (Packing Credit) Insurance www.dgftguru.com

  3. TERM BORROWINGS With a Term Loan, you borrow money and pay it back over time. Financer-specific factors allow for flexibility in this range, typically between 10 and 30 years. These loans usually come with interest that needs to be paid back in addition to the principal loan amount. A company will take out a term loan to fund a project that yields a profit. LC, OR LETTER OF CREDIT Avoiding the possibility of not receiving payment is one of the primary uses for letters of credit. The buyer's bank issues a payment guarantee to the vendor in exchange for the supplied goods. Financial institutions are usually willing to extend credit in exchange for a Letter of Credit (LC) due to the inherent security that the lending institution will honor the LC's payment conditions in the event of a default. www.dgftguru.com

  4. INVOICE DISCOUNTING Your invoice can be paid off more quickly if you take it to a bank, a financial institution, or a trade financing firm. A bank or other financial institution may choose to acquire, collect, or discount the bill. CREDIT FOR EXPORTS Packing Credit is a sort of pre-shipment financing obtained from a lender in exchange for an export order from a buyer. Once payment is received from the buyer overseas, the export packaging credit value will be revised, and the loans will be closed in connection with that order. www.dgftguru.com

  5. CONCLUSION The Indian government established the EPCG Scheme to ease the process of importing capital goods and machinery to increase the production of goods and services. EP License is a type of export promotion license. In exchange for an Export Obligation equal to 8 times the duty savings, imports of capital goods are permitted at a reduced customs duty rate of 3% for eight years from the date of Authorization issuance. www.dgftguru.com

More Related