London acceptance credit

Updated: Aug 20, 2021

An exporter’s credit with a London accepting house or bank, which enables him to draw bills of exchange. On them conditionally. e.g. payable within three months and up to a stated amount. Credits may be indefinite or for a fixed period. If the latter. maturing bills will often be replaced by others, and this is known as a revolving credit, security is usually though not always necessary, and may take the form of letters of hypothecation, tender of shipping documents, etc. By this means the exporter obtains cash immediately, perhaps before the goods are made, or when they are shipped. He is obliged to put funds at the disposal of the acceptor when the bills are due for payment.

Reference: The Penguin Business Dictionary, 3rd edt.

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