Do you want to offer payment terms to your buyers to penetrate new foreign markets and still get paid when you ship the merchandise? A Banker’s Acceptance may be your answer. It is a time draft, drawn on and accepted by a bank. It is the accepting bank’s obligation to pay you, or the holder of the draft at maturity. The advantages of a Banker’s Acceptance are:
- it is a reliable source of funds, even during tight money conditions when funds available for direct lending may be limited.
- as an exporter, you can sell the Banker’s Acceptance at a discount before payment is due, thus obtaining funds up front from the issuing bank.
- there is little exposure to political risk or exchange controls imposed by the buyer’s government.
- it is typically less expensive than prime-related financing because no compensating balances are required.
National Penn can customize the Banker’s Acceptance to cover the entire period needed to ship and dispose of the goods financed.