Finance international business Research Paper Example | Topics and Well Written Essays - 2500 words

Finance international business - Research Paper ExampleThis includes manufacture ring, processing, buying, transportation, computer memory etc. Pre-shipment credit is also called as packaging credit in some countries. This is short border finance.Post shipment finance is the credit offered to the importer in order to buy goods. Not all exporters ar financially sound to extend credit to the importer. In order to encourage importers financial assistance is offered to them. This is through through financial institutions, commercial banks especially.Under the consignment terms of purchase the importer makes allowance to the exporter only when the goods are sold to the end user and payment is received from them. This type of purchase poses high risk to the exporter as thither could be indefinite delay in the sale of goods to the end user. It however favors the importer. This type of payment is observed in case of very high trust among the traders or if the exporting firm is financial ly capable enough to incur the loss, if there is any.The name clearly suggests the feature of this financing option. The importer has to pay in advance to receive the goods. In other words the payment is done before the shipment of the goods. Again, there are a few reasons for choosing this option. The importer is yet to establish a name in the market or the exporter has little faith in the financial status of the importer. The high demand of the product could be some other reason for opting this mode of payment. The Cash-in-Advance type payment poses high risk to the importer.This financial instrument poses equal occur of risk to both, the importer and the exporter. The importer has to pay a certain part of the payment in advance to initiate the trade. The tear payment is paid at the time of signing the contract or shortly thereafter. The risk tough for the exporter is that the importer may not pay after receiving the goods. Similarly the exporter may not deliver the goods afte r receiving the garbage down payment. Hence, the risks are