The concept of export seller's credit;
Export seller's credit is a commercial loan provided by export banks to domestic exporters. The exporter (seller) uses this loan as an advance payment, allowing the importer (buyer) to buy their own products and equipment on credit. Exporters (sellers) generally include capital costs such as interest in the export price and transfer the loan costs to importers (buyers).
The concept of export buyer's credit;
Export buyer's credit means that the government of the exporting country supports the exporter's bank to provide credit support directly to the importer or importer's bank, so that the importer can purchase technology and equipment and pay related expenses. The export buyer's credit is generally provided by the export credit insurance institution of the exporting country. There are two main forms of export buyer's credit: first, the exporter's bank lends money to the importer's bank, and then the importer's bank lends money to the importer; Second, the exporter's bank directly lends money to the importer, and the importer's bank issues a letter of guarantee. The currency of the loan is USD or other currencies agreed by the bank. The loan amount shall not exceed 80% ~ 85% of the trade contract amount. The loan term depends on the actual situation, generally not exceeding 10 years. The loan interest rate depends on the interest rate level determined by the Organization for Economic Cooperation and Development (OECD).