Who are the parties involved in Pre-shipment Finance?

A typical Pre-shipment financing transaction involves two main parties: the seller and the finance provider. The buyer is not a party to the financing transaction but depending on the contractual arrangement with the finance provider, the source of the repayment is usually the flow of sales proceeds from the buyer. The history of the commercial relationship is a factor in determining the probability of repayment. Bank and non-bank finance providers are active in this type of financing, particularly in Asia.