Export Finance

Export finance provides critical liquidity solutions for exporters, bridging funding gaps in global trade cycles through pre-shipment and post-shipment facilities. Pre-shipment finance covers production costs, raw material procurement, inventory buildup, and order fulfillment, enabling businesses to accept large orders without upfront capital constraints. Post-shipment finance, such as negotiation of export bills or discounting of documents, converts receivables into immediate cash, addressing payment delays from foreign buyers who often extend terms to 90-180 days. These instruments, governed by RBI guidelines and supported by ECGC insurance, mitigate risks like currency fluctuations, political instability, and buyer defaults, ensuring steady cash flow and operational continuity.

Types of Export Packing Credit

Export packing credit in India includes rupee-based and foreign currency-based facilities, offered as short-term loans (up to 180-360 days) for pre-shipment needs. Key types are:

• Rupee Packing Credit: Funded in INR for domestic procurement, processing, and packing; concessional rates (6-9%) via EXIM Bank refinancing.
• PCFC (Pre-Shipment Credit in Foreign Currency): USD/EUR loans hedged against forex risk, convertible to post-shipment bills; ideal for import-dependent exporters.
• Supplier Packing Credit: Extended to manufacturer-suppliers without direct export orders, backed by confirmed orders from merchant exporters.
• Repayment-Linked: Liquidated via post-shipment proceeds or ECGC cover, with moratorium till shipment.

Eligibility & Documentation Requirements

Exporters must hold a valid IEC from DGFT, a confirmed export order or an irrevocable LC, and GST/PAN registration. Additional requirements include a good CIBIL score/track record, minimum 1-3 years of business vintage, positive export history (FIRCs/BRCs), and production capacity proof (factory license, quality certifications like ISO). MSMEs/new units qualify via priority sector lending; no collateral for limits up to Rs. 5 crore with ECGC cover.

Risk Factors & Bank Scrutiny

Conversely, poor history—like shipment delays, excess packing credit over export value, or unadjusted advances—raises red flags, triggering stricter scrutiny, reduced sanctions, collateral demands, or outright rejection to avoid NPAs. New exporters without history face hurdles but can mitigate via ECGC cover or confirmed LCs from credible buyers. Overall, robust performance history enhances trust, enabling seamless access to pre-shipment finance for scaling operations.

How Sriya Enterprise Supports Exporters?

Types include rupee packing credit for INR-funded domestic needs, PCFC (pre-shipment credit in foreign currency) for USD/EUR imports – offset, supplier credit for manufacturers without direct orders, and repayment-linked facilities liquidated by export proceeds. Sriya Enterprise streamlines applications, document perfection, and bank liaison for quick approvals.