Export Finance

What Is Export Finance?

Export Finance is working capital that banks extend to exporters against confirmed export orders or export bills. It bridges the gap between buying raw material for an export order and receiving payment from the overseas buyer — a gap that can run to several months.

It comes in two stages: pre-shipment credit (packing credit) to procure, manufacture and pack the goods, and post-shipment credit to fund the period after the goods are shipped until the buyer pays, typically by discounting or purchasing the export bill.

Key Features & Benefits

• Pre-shipment credit (packing credit) in Rupees or foreign currency
• Post-shipment credit through export bill discounting / purchase
• Funds linked to confirmed export orders or letters of credit
• Generally priced below regular working capital
• Helps accept larger orders without straining cash flow

Eligibility Criteria

• Valid Importer-Exporter Code (IEC) from DGFT
• Confirmed export order, contract or letter of credit
• Satisfactory banking track record and credit standing
• Existing exporters and first-time exporters (case-specific)

End Use Of Funds

• Purchase of raw material and inputs for the export order
• Manufacturing, processing and packing of export goods
• Bridging the gap between shipment and buyer payment
• Meeting freight, insurance and shipment-related costs