Question

Write short notes of the following.

Pre-shipment finance?

Answer 1

Generally, firms require finance for various activities, such as purchase of raw materials, inputs and manufacture of goods. In the case of exporters, this finance is obtained from banks in the form of advances known as “pre-shipment finance”. These advances are termed as ‘pre-shipment finance’ because they are primarily used in operations undertaken before the final shipment of goods takes place.