The bill is immediately discounted and the beneficiary can immediately dispose of cash. This is done immediately after submission of the appropriate documents to the. The C. immediately initiated one. The goods may not be transported on the crossing (see reimbursement credit):
With a repo credit import and export transactions are financed, in which, for example, a local customer offers the foreign seller the adoption of a house bank for purchase price security. The exporter receives the amount of money by deduction after the house bank has handed over the acceptance in exchange for the shipping documents.
This is a combination of letter of credit, acceptance credit (acceptance) and discount credit (discount). The refund credit applies when an exporter delivers goods to a foreign importer who must give him the opportunity to pay later (eg due date 180 days), but the franchise may be forfeited. The importer must draw up a letter of credit (duration: 180 days) in favor of the exporter.
The exporter records a check on her own bank accepting it (Acceptance Loan). Upon request, the exhibitor can discount the drawn exchange rate before the end of the 180 days and receive the amount (discount credit). When the change is due, it will be submitted to the exporter’s house bank for reimbursement. The latter then has a claim against the exporter, which is insured after 180 days after receipt of the letter of credit (from the foreign importer).
The exporter, who has already taken this into consideration when pricing, must pay the costs and fees incurred. At the same time, the goods are despatched and the shipping documents are forwarded to the importer so that the importer can take over the goods from the freight forwarding or customs warehouse after having paid the amount of the credit.
Acceptance loan, which is usually used in foreign trade.
On presentation of the agreed documents (eg shipping document, insurance policy, invoice), Best bank accepts a bill of exchange purchased from the exporter and redeemed when due. This (“bank acceptance”) may be discounted by the exporter to his commercial bank (or another commercial bank, or it may also be the repo bank itself), so that he can immediately dispose of the amount of change (after deduction of discount and costs).
In this way, R. represents a link between acceptance credit (with the importer) and discount credit (with the exporter). A R. is often given in combination with a letter of credit. Thus, for example, the exporter’s export bank can settle the exporter’s indulgence by means of a discount line granted to it before receipt of the acceptance, also in the course of the rebate line of the rebate bank (discount credit).
Regardless of the method of settlement, the importer must keep the amount owed by the repo bank until the due date. A R can benefit both the exporter (“safeguarding the payment period”) and the importer (“avoiding the commitment of funds by paying in advance”).