Supplier
Credit

Supplier Credit

Suppliers' credit is a trade credit financed by a letter of credit to the importer (LC). Under the LC form of payment, importers are funded preferably from the seller's country by overseas suppliers or financial institutions at cheaper rates than the local source of financing, similar to Libor rates. It is helpful to the seller because directly after the shipment of goods, the seller collects compensation, which in turn lets the importer bargain for better rates. Importers are switching to suppliers' credit facilities because it also allows using cheap interest rates such as buyers' credit.The key benefits of supplier’s credit:

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The suppliers/ exporter are dealt with on a sight basis

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Importers can negotiate for better commercial terms.

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Source of funds at low cost

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Since only LC imports qualify for supplier credit, the risk is mitigated in the process.

The cost involved in the supplier’s credit:

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Cost of interest from foreign banks

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Foreign Bank LC Confirmation Cost (Case to Case basis)

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Advising and or altering costs for LC

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Cost of Negotiation (generally in the range of 0.10 percent)

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Swift Charges and Postage

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Charges of Reimbursement

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Cost of the usance (credit) tenure. (Indian Bank Cost)

Advantage of Supplier’s Credit (SC) Services from Finnova Advisory

Finnova Advisory offers Supplier’s Credit (SC) assistance. We have formed alliances with numerous banks and financial institutions to provide a wide range of lender options. According to your eligibility and financial requirement, we recommend quick processing, competitive interest rates, and multiple collateral options to ensure that this is the best option for your business. We also deal with private, PSUs, co-operative banks, and NBFC’s.

Along with this, our team of specialists takes pride in offering unbiased advice to our customers regarding our services. Acting as a mediator, we are readily available to help you apply for corporate finances service from some leading banks and financial institutions.