To Avail Buyer’s / Supplier’s Credit….. E: sanjaymandavia@gmail.com, M:+919825560186
- Supplier’s Credit can be arranged against LC transactions only, where as Buyer’s Credit can be arranged for any type of payment mode (LC Sight, LC Usane, DA and DP) except advance payment.
- Clauses in the Lc would need amendment or few clauses will have to be incorporated as per the requirement of the supplier’s credit providing bank. In buyer’s credit, as the arrangement is after documents reaches your banks counter, no such clause are required to be incorporated.
- Supplier’s Credit has to be arranged before shipment of the goods or at the time of LC opening where as Buyers Credit can be arranged only after documents come at your bank counter for payment or on due date.
- There can a difference in time of your cash flow. Many banks are structuring the transaction where in overall pricing is divided between confirmation cost and discounting cost, where confirmation cost is payable upfront at the time of advising the Lc. Where as in buyers credit, as the payment is in form of interest and it is payable only on maturity.
Sanjay Mandavia
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