Reply To: Describe using working capital limits.

[Anonymous]

The different kinds of credit available in foreign trade finance are cash credit and overdraft. These help exporters and importers apply for cash when needed as long as the credit lines are open. Lines of credit are another form of borrowing. As far as I know, the difference is, this is short-term funding with interest being charged based on the period and amount of utilization. Businesses can borrow small amounts of money from working capital limits when they have insufficient balance to operate their business. Once they receive funds, the borrower has to reimburse the banks to avoid higher interest charges.