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A packing credit is a loan made available to exporters in order to finance the procuring of goods before shipment. For those who deal in shipping goods or machinery overseas, packing credit is a viable loan opportunity because it offers the exporter a more flexible payment plan than typical bank loans.
Credit to Purchase Goods
Packing credit provides capital for you to purchase any goods you plan on exporting. Sometimes the cost of purchasing the goods you need to ship exceeds your budget, so a packing credit offers you the safety in knowing you will have money available to buy your goods.
Lower Interest Rates
Unlike a bank loan where interest accrues for an overdraft, packing credit offers lower interest rates to exporters. Interest rates vary depending on the nature of your business, your area and the amount you are borrowing, but packing credit is typically lower than other standard bank loans.
Covers Manufacturing Costs
For exporters who have product that must be manufactured out of house, the packing credit covers the associated costs, such as raw materials and wages. Furniture and other goods not made in the same country as the exporter have to be shipped to the exporter, which is also covered by most packing credit agreements.
Flexible Credit Terms
Because packing credit is purchased based on the needs of your business, the terms are usually flexible, depending on your business. Payment plans and overdrafts are often more flexible to allow the exporter to pay back the loan when he receives payment for the shipment. During the interim, all financing for the exporter continues.