Buyer credit is a term that means the credit available to an importer or buyer from overseas from lenders such as banks and other financial institutions for imported goods.

1. Buyers Credit Means
Buyer credit is a term that means the buyers credit means available to an importer
or buyer from overseas from lenders such as banks and other financial institutions
for imported goods.
The overseas banks usually lend the buyer based on the letter of comfort which is
also known as 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.
A buyer’s credit is an extremely useful financing method which is used in
international trade as it gives importers access to cheaper funds compared to what
may be available locally. This is a short-term loan facility that is extended to an
importer by overseas lenders including banks and financial institutions. The importer
to whom the loan is issued is the buyer of goods, while the exporter is the seller.
Benefits
● This Facilitates exports for SMEs (Small Medium Enterprises) by providing
credit to overseas buyer to import goods from India.
● Buyer's credit Offered for financing capital goods or services on deferred
payment terms.

2. ● Provides non-recourse finance to Indian exporters by converting deferred
credit contract into cash contract.
● Extended as advance payments to Indian exporters on behalf of the overseas
buyer.
● It Can be a transaction specific financing or a revolving/renewable limit.
● It Can be extended to more than one overseas subsidiary of any Indian
company Since it is a non-LC transaction, it saves LC (Letter of Credit)
charges.