Pre-shipment credit
Pre-shipment credit is a short-term loan provided to exporters to finance the procurement, processing, and packing of goods before shipment. This type of credit helps exporters prepare goods for export without facing cash flow issues. It is typically granted against export orders or letters of credit and is repaid once the export proceeds are received. An example of pre-shipment credit includes the extended packing credit loan, which is extended for a longer duration to cover additional expenses. These loans are usually offered by commercial banks, export credit agencies, or financial institutions specializing in trade finance.