Lives and Livelihoods

A similar procedure is used where a period of trade credit has been given, but the exporter himself finances the shipment _____ and until the bill, duly accepted by the buyer, has been returned to the bank in the exporter’s country. The accepted bill may then be “discounted” by the exporter’s bank for the period until maturity; discounting in the normal course means that the interest factor for the unexpired term of the bill is calculated and deducted from the face amount. The net amount is then paid to the exporter and the bank collects the face amount at maturity for its own account. When the contract sale so allows, such discount may be charged to the buyer at maturity of the bill; the exporter is paid the face amount at the time of discount. This condition must be indicated on the bill by an appropriate clause, however, at the time of presentation to the buyer for his acceptance. Another alternative is for the exporter to pledge his export bills with his bank as receivables in full or partial security against a general credit line.

These methods by which the exporter obtains the before payment of the bill are basically loans to the customer and are so regarded by the banks, which retain full recourse to the exporter in the event of dishonor by no-payment or non-acceptance of bills negotiated or discounted. The banks must also consider the credit background of each bill before such negotiation or discount.

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Georgia Workers Compensation Insurance