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GLOSSARYTERMS AS A CREDIT DESK USES THEM

Post-shipment finance

What is post-shipment finance, and what does the bank lend against?

ONE OF 366 TERMS · FREE · NO SIGNUP

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

Post-shipment finance is lending to an exporter after the goods have shipped, against the export receivable or the shipping documents, until the overseas buyer pays. It takes several forms: discounting an accepted usance draft or a deferred payment under a letter of credit, advancing against documents sent on collection, or financing export invoices on open account. The lender's risk depends on what stands behind the receivable: a bank's undertaking under a letter of credit, a bill the buyer has accepted, or only the buyer's promise on an invoice, sometimes backed by credit insurance.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

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