Question

What is pre shipment Finance?

Answer 1

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Pre-shipment finance refers to the credit extended to exporters prior to the shipment of goods for the execution of export order. It, refers to any loan granted to an exporter for financing the purchase, processing manufacturing or packing of goods as defined by the Reserve Bank of India.

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Answer 2

Answer:

Pre-shipment finance includes any finance that an exporter needs before they send goods to a buyer. Once the business has a confirmed order from a buyer, which is sometimes backed by a Letter of Credit, working capital finance is often required to fund wages, production costs and buying raw materials. Exporters can access receivables backed financing, inventory/ warehouse financing and pre-payment financing.