Export Pre-Financing

Export Pre-Financing (Pre-Embarkment)

Export pre-financing, or pre-embarkment financing, is designed to provide exporters with the necessary funds to cover production costs, purchase raw materials, and secure capital goods needed to fulfill an export order. This financing is crucial in the early stages of the export process, allowing exporters to prepare for shipment without the financial burden of upfront costs. The pre-financing phase is secured against an export contract or firm purchase order, ensuring that the funds are used exclusively for the export program. The key focus is on ensuring that exporters have the resources required to produce and prepare goods for shipment, directly supporting their suppliers and production processes.

Documentation

1. Export Contract or Firm Purchase Order: A signed agreement or order confirming the export transaction.

2. Company Registration Documents: Copies of the company's articles of incorporation and registration with relevant authorities.

3. Financial Statements: The last two years of audited financial statements, including balance sheets and income statements.

4. Tax Compliance: Proof of tax registration and compliance (e.g., VAT number, tax clearance certificate).

5. Detailed Export Plan: Outline of the export process, including timelines, suppliers, and logistics arrangements.

6. Proof of Exporter’s Experience: Documentation of past export transactions, including volumes and destinations.

7. List of Suppliers: Details of suppliers involved in the export process, including payment terms and agreements.

8. Guarantees and Collateral: Information on any collateral or guarantees being offered, such as property, insurance policies, or third-party guarantees.

9. Insurance Policies: Export credit insurance or pre-financing insurance policy documents.

10. Bank References: Letters from banks confirming creditworthiness and financial stability.

11. Personal Identification: Copies of ID documents for company directors and shareholders.

12. Cash Flow Projections: Projections showing the expected cash flow from the export transaction.

13. Payment Methods: Details of the payment methods agreed upon with the importer (e.g., letters of credit, bank drafts).

This documentation is necessary to assess the risk and ensure that the pre-financing is used appropriately for the export operation.