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GLOSSARYTERMS AS A CREDIT DESK USES THEM

Trust receipt

What is a trust receipt in import finance?

ONE OF 209 TERMS · FREE · NO SIGNUP

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

A trust receipt is the importer's undertaking, given when the bank releases shipping documents before it has been repaid, to hold the goods, or the money from selling them, on the bank's behalf until the import loan is cleared. It lets the importer take delivery and sell while the bank keeps a claim over the goods and their proceeds. How strong that claim is depends on the documents and on local law, so a lender reads the importer's control of its sale proceeds as closely as the receipt itself.

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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