Commercial finance company Capital Business Credit (CBC) announced recently that it now has an option for importers to extend their credit terms. According to a Trade Financing Matters blog post, CBC developed Supplier Early Payment (SEP), which allows importers to extend credit for up to 90 days on open account credit terms.
Additionally, the SEP funding method does not create bank debt and increases liquidity to grow the business. As the news source explained, this option enables a way to receive early payment for exporters in Asia that have material concentration risk with one buyer. Essentially, SEP provides another layer of assurance to manufacturers in Asia around the creditworthiness of their customer.
“The importer must be willing to confirm its obligation to pay for the goods without offset, counterclaim or deduction based upon prior supplier performance,” explained the news source. “CBC Trade Finance receives the title documents from the exporter, and can release to the importer against receipt of the trade acceptance or no offset letter.”
From there, CBC Trade Finance will discount the trade acceptance for up to 100 percent, minus any discounts, and will then pay the exporter or its supplier.
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