What is a Buyer’s Credit ?

Buyer's credit is a short term credit available to an importer (buyer) from overseas lenders such as banks and other financial institution for goods they are importing. The overseas banks usually lend the importer (buyer) based on the letter of comfort (a bank guarantee) issued by the importer's bank. For this service the importer's bank or buyer's credit consultant charges a fee called an arrangement fee. Buyer's credit helps local importers gain access to cheaper foreign funds that may be closer to LIBOR rates as against local sources of funding which are more costly. The duration of buyer's credit may vary from country to country, as per the local regulations. For example in India, buyer's credit can be availed for one year in case the import is for tradeable goods and for three years if the import is for capital goods. Every six months, the interest on buyer's credit may get reset.

I agree with all the answers.

Buyer's credit is a short term credit available to an importer (buyer) from overseas lenders such as banks and other financial institution for goods they are importing. The overseas banks usually lend the importer (buyer) based on the letter of comfort (a bank guarantee) issued by the importer's bank.

How Buyer’s Credit works

1. Your bank arranges a line of credit with overseas banks to help you import goods
2. The overseas bank pays your bank directly, and your bank then pays your supplier on the import due date
3. You then pay the overseas bank on the buyer's credit due date
4. Your bank can usually arrange import bills up to USD20 million, ensuring a one-year line of credit for raw materials and three years for capital expenditure goods

Study the feasibility of obtaining financing

Buyer

 

For commodity

Well explained by Mr. Jetley

Advance credit to import items. 

Purchasing credit limit of card holder, which is provided by bank.

Agreed with Mr. Jetley answer.

The cardholder credit limit.

A Buyers Credit is a foreign fund made available to an importer by a Bank to meet the payment of the importer to his exporter.