Buyer’s credit is financing provided to an importer or foreign buyer to pay an exporter under an international sale. A bank or export finance institution pays the exporter and the buyer repays the financing over the agreed tenor.
How does Buyer’s Credit work in practice?
A bank or finance provider lends to the importer, or pays the exporter on the importer’s behalf, under a buyer’s-credit facility. The exporter receives payment according to the trade documents while the importer repays the financing provider over the agreed term. The credit agreement and the underlying supply contract remain separate records with different obligations.
What should a business document for Buyer’s Credit?
Retain the export contract, borrower documents, disbursement conditions, guarantee or insurance, repayment schedule and shipment evidence.
What should a business verify before relying on Buyer’s Credit?
The buyer takes financing and currency obligations that may outlast delivery. Country, bank and project risks shape availability and price.
