What Is Importer Loans ?

An import Loan is a short-term cash advance (with recourse) that enables the customer as an importer to meet the customers immediate payment obligations under a sight or usance Letter of Credit presentation or Import Documentary Collection. Under such arrangements, Standard Charted Bank finances the customers import commitments by making payment against the Letter of Credit or Documentary Collection and receives payment from the customer at a pre-determined date in the future. Here, the credit period between the time that the bank provides finance and the time the customer repays the bank, should be sufficient for the customer to either manufacture goods for final sale or for direct sale to end buyers. Nepal is an import based economy. Most of the raw materials for manufacturing are import based.  Trust Receipt Loans are easier and popular to finance imports through Letters of Credit facility for trading and manufacturing houses. Such loans are provided for maximum of 120 days of documents retirements. Importers loans are provided for imports under payment mode of TT, Demand Drafts and DAP facility.

Benefits Of Importer Loan

• This will allow the customers more financial resources to clear goods from the port and manufacture, store or arrange for final sale to the end buyer
• The supplier is independent of the process of raising finance. They need not sign any documentation, but receive payment as per the original contract terms through the Letter of Credit or Bill for Collection
• As the customer is able to reimburse the suppliers on a sight basis or when the tenor is due, this will increase the bargaining power of the customer - typically in terms of the contract price.