Raw Materials
Finance materials and inputs required to manufacture or produce the contracted goods.
Pre-Shipment Finance
Finance Export Orders Before the Goods Are Shipped
Financely structures pre-shipment finance for exporters, manufacturers, producers and commodity suppliers that need working capital to fulfill confirmed commercial orders before delivery and invoicing.
The facility can finance raw materials, supplier payments, production, processing, packaging, inventory build and export logistics against an identifiable purchase order, sales contract, letter of credit or other qualifying commercial demand.
01
Confirmed Demand
Purchase order, sales contract, LC or another identifiable commercial demand signal.
02
Defined Cost to Fulfill
Raw materials, production, processing and logistics costs can be quantified.
03
Credible Buyer
The buyer, importer or offtaker must be identifiable and subject to underwriting.
04
Repayment Route
Buyer proceeds, receivables finance or another defined settlement mechanism.
Before Shipment
The Export Order Generates Revenue Later. Production Requires Cash Now.
A large order can increase revenue while simultaneously creating a liquidity gap. Suppliers may need to be paid, inventory built, goods processed and logistics booked weeks or months before the exporter receives payment from the buyer.
Use of Proceeds
Finance the Expenditure Required to Fulfill the Order
The financing requirement should be connected directly to the production and delivery cycle of an identifiable commercial transaction.
Supplier Payments
Pay upstream suppliers whose settlement terms occur before customer payment.
Production Costs
Fund eligible manufacturing, labor and production expenditure linked to order fulfillment.
Conversion & Processing
Finance the conversion of raw or semi-finished goods into the contracted finished product.
Order-Specific Inventory
Build qualifying inventory required to meet contracted delivery volumes.
Packaging & Logistics
Finance eligible packaging, inland transport, inspection and other pre-shipment logistics expenditure.
Financing Cycle
From Purchase Order to Buyer Payment
Pre-shipment finance addresses the portion of the cash conversion cycle that occurs before delivery. Once the goods are shipped or accepted, the facility can be repaid or refinanced through an appropriate post-shipment structure.
01
Order
Buyer issues a purchase order, contract or other qualifying commercial commitment.
02
Finance
Working capital is advanced against eligible order fulfillment expenditure.
03
Produce
Exporter purchases inputs, manufactures, processes or assembles the goods.
04
Ship
Goods are delivered according to the underlying commercial contract.
05
Repay
Buyer payment or post-shipment finance settles the pre-shipment facility.
Facility Structures
Match the Financing Structure to the Export Order
The appropriate facility depends on the buyer commitment, production cycle, supplier arrangements, transaction tenor and available collateral or credit enhancement.
01
Purchase Order Finance
Working capital structured around an eligible confirmed customer purchase order.
02
Sales Contract Finance
Finance qualifying production costs against an executed commercial sales contract.
03
LC-Backed Pre-Shipment Finance
Structure production working capital around qualifying documentary credit issued in support of the export sale.
04
Pre-Export Finance
Finance qualifying production, aggregation or processing against identifiable future export cash flows.
05
Supplier Payment Facility
Finance selected upstream suppliers required to fulfill the underlying export order.
06
Order-Specific Working Capital
A short-duration facility matched to the production and payment cycle of the underlying contract.
07
Revolving Pre-Shipment Facility
Reusable capacity for exporters with recurring qualifying orders from acceptable buyers.
08
Pre-to-Post Shipment Facility
Finance production first and transition the exposure into eligible receivables finance after shipment or acceptance.
Credit Underwriting
A Purchase Order Helps Define Demand. The Entire Execution Cycle Still Has to Work.
Lenders need confidence that the exporter can procure, manufacture and deliver the contracted goods within the agreed budget and timeline. The underwriting case therefore covers the buyer, supplier chain, production plan, margins, execution risk and final source of repayment.
Buyer Quality
Credit quality, payment record and enforceability of the underlying purchase obligation.
Exporter Capability
Operating history, production capacity, financial condition and previous fulfillment performance.
Purchase Order
Amount, specifications, delivery conditions, cancellation rights and payment terms.
Cost to Fulfill
Raw materials, production, supplier, processing and logistics expenditure.
Gross Margin
Sufficient transaction economics to absorb financing costs and execution variance.
Repayment
Buyer payment, documentary proceeds, receivables financing or another defined repayment route.
Eligible Businesses
Pre-Shipment Finance for Companies With Real Orders to Fulfill
The strongest cases involve established businesses with identifiable buyers, documented orders and a clear working-capital requirement directly connected to fulfillment.
Export manufacturers
Physical commodity exporters
Agricultural producers
Food processors
Metals and mineral exporters
Industrial manufacturers
Apparel and textile exporters
Equipment manufacturers
Consumer goods exporters
Contract manufacturers
Commodity aggregators
Suppliers to large corporate buyers
Lender-Ready File
What We Need to Structure Pre-Shipment Finance
The lender should be able to trace the transaction from the underlying order through production, shipment, invoicing and repayment.
Purchase Order
Confirmed PO, sales contract, call-off order or other commercial demand evidence.
Sales Contract
Product, quantity, price, delivery, payment and acceptance terms.
Cost-to-Fulfill Budget
Raw materials, suppliers, labor, processing, packaging and logistics.
Supplier Quotes & Contracts
Evidence of required inputs, pricing, lead times and payment obligations.
Production Schedule
Manufacturing, processing, inspection and expected shipment milestones.
Export Plan
Shipping route, delivery terms, warehouse requirements and relevant logistics counterparties.
Transaction Model
Revenue, gross margin, working-capital need, financing tenor and repayment.
Financial Statements
Historical financials, current management accounts and existing borrowing facilities.
Corporate & KYC File
Corporate records, beneficial ownership and transaction counterparties.
Repayment Architecture
Pre-Shipment Finance Needs a Defined Post-Shipment Exit
The facility should have a clear path from production-stage lending into repayment. Depending on the transaction, the lender may be repaid directly from buyer proceeds or the exposure may transition into a receivables-finance structure after shipment.
Buyer Payment
Contract proceeds settle the financing after delivery or acceptance.
Documentary Credit Proceeds
Eligible LC proceeds provide the repayment source following compliant presentation.
Receivables Discounting
The completed trade converts into an eligible receivable that is financed after shipment.
Factoring
Eligible post-delivery invoices can potentially refinance the production-stage facility.
Controlled Collection
Buyer proceeds can be directed through agreed repayment accounts or waterfalls.
Financely Process
From Confirmed Order to Funded Production Cycle
Financely reviews the underlying trade, determines the peak working-capital requirement and structures the facility around production milestones and the expected source of repayment.
01
Review
Assess the order, buyer, exporter, production cycle and payment terms.
02
Model
Calculate the cost to fulfill and peak working-capital requirement.
03
Structure
Design the pre-shipment facility, controls and repayment mechanism.
04
Place
Coordinate suitable banks, trade lenders and specialty finance providers.
05
Execute
Support underwriting, documentation, funding and transition into repayment.
Frequently Asked Questions
Pre-Shipment Finance
What is pre-shipment finance?
Pre-shipment finance is working capital provided before goods
are delivered. It can finance sourcing, manufacturing,
processing, packaging and other expenditure required to
fulfill an eligible commercial order.
What can pre-shipment finance pay for?
Depending on the facility, eligible uses may include raw
materials, supplier payments, manufacturing, processing,
labor, packaging, inventory build and export-related
logistics.
Do I need a purchase order?
A confirmed purchase order is one common basis for
pre-shipment financing. Depending on the transaction, an
executed sales contract, documentary letter of credit or
another sufficiently reliable demand signal may also support
underwriting.
Is pre-shipment finance the same as purchase order finance?
Purchase order finance is one form of pre-shipment finance.
Pre-shipment finance is broader and can include facilities
based on sales contracts, documentary credits, export
contracts or recurring eligible order flows.
Is pre-shipment finance the same as pre-export finance?
The terms overlap in many transactions. Pre-export finance is
commonly used where production, aggregation or processing is
funded against future export proceeds. Pre-shipment finance
more broadly refers to financing provided before delivery of
the relevant goods.
Can a letter of credit support pre-shipment finance?
Potentially. An acceptable documentary credit can provide
evidence of the underlying buyer obligation and may strengthen
the repayment structure. The lender will still review the
exporter, transaction and documentary terms.
Can pre-shipment finance cover supplier payments?
Yes, where the supplier expenditure is directly connected to
fulfilling the financed order and meets the lender's
eligibility requirements.
How is pre-shipment finance repaid?
Repayment may come directly from buyer proceeds or the
facility may transition into post-shipment receivables
financing after delivery. The precise repayment route is
established during structuring.
Can I obtain a revolving pre-shipment facility?
Potentially. Exporters with recurring eligible orders,
acceptable buyers and sufficient operating history may be
candidates for reusable working-capital capacity rather than
financing each order separately.
Can commodity exporters use pre-shipment finance?
Yes. Qualifying commodity producers, processors, aggregators
and exporters may be considered where production, purchase,
offtake, logistics and repayment are sufficiently defined.
Does Financely provide the capital directly?
Financely provides transaction structuring, advisory and
capital sourcing services. Financing is provided by
third-party banks, trade finance lenders, private credit funds
and other eligible capital providers.
Is funding guaranteed?
No. Financing remains subject to independent underwriting,
buyer and supplier review, KYC, AML, sanctions screening,
documentation, collateral requirements and final approval by
the applicable capital provider.
Have an Export Order You Can Fulfill if the Working Capital Is Available?
Send us the purchase order or sales contract, buyer, order value, cost to fulfill, supplier requirements, production timeline, expected shipment date, payment terms and requested financing amount. Financely can assess the transaction and structure an appropriate pre-shipment finance solution for institutional review.
Request a Pre-Shipment Finance QuoteFinancely provides corporate finance advisory, trade-finance structuring and capital sourcing services on a best-efforts basis. Financely is not a bank, direct lender, deposit-taking institution or custodian and does not itself provide pre-shipment finance facilities. All financing remains subject to independent underwriting, buyer and supplier review, KYC, AML, sanctions screening, legal documentation, transaction verification, collateral requirements and final approval by the applicable financing institution. Purchase orders, sales contracts and letters of credit do not independently guarantee financing. Financely does not guarantee lender approval, facility availability, funding or transaction completion.