Buyers Credit
A short term loan facility extended to an importer by a bank or financial institution to finance the purchase of raw material or capital goods. The overseas banks usually lend the importer (buyer) based on the letter of comfort (a bank guarantee) issued by the importer's bank. It benefits both the seller (exporter) and buyer (importer) in a trade transaction. The exporter is paid in
accordance with the terms of the sale contract with the importer, without undue delays. in India, buyer's credit can be availed for one year in case the import is for raw material goods and upto Five years (3+2 years) if the import is for capital goods. Supplier's Credit
Supplier credit is an offer of credit that is extended to a buyer by a seller or supplier. This model is often used in a number of settings, including the importing/exporting business, as well as in supplying goods and services to businesses of all sizes. Credit of this type allows the buyer to receive the products needed now, paying for them later in accordance with the terms and conditions agreed upon with the seller. Usance Bills under Letter of Credit (LC) issued by Indian bank on behalf of their importers are discounted by overseas banks, preferably of Seller's Country, Paying your suppliers at sight against Usance bills under letter of credits
