Pre-Shipment Finance

A. Introduction

Pre‑Shipment Finance is a short‑term working capital facility that enables businesses to fund the purchase, production, and preparation of goods before they are shipped to customers. Instead of waiting for customer payments or using internal cash reserves, companies can access financing to cover raw materials, manufacturing costs, packaging, logistics, and export‑related expenses.

This solution is essential for businesses that operate on credit terms, manage large purchase orders, or face seasonal demand fluctuations. It ensures uninterrupted production cycles, timely order fulfillment, and improved cash flow — all without the need for traditional collateral.

Krystal Financial Consultants partners with leading banks and finance companies across the GCC, Asia, and Africa to arrange fast, flexible, and competitively priced Pre‑Shipment Finance facilities. With deep trade finance expertise and strong lender relationships, Krystal helps businesses secure the funding they need to execute orders efficiently and grow with confidence.

B. How Pre‑Shipment Finance Works

Pre‑Shipment Finance provides liquidity at the most critical stage of the supply chain — before goods are manufactured or shipped. Krystal manages the entire process, ensuring smooth coordination between your company, suppliers, and financing partners.

Step‑by‑Step Process

1. Purchase Order Received
Your customer issues a confirmed purchase order or export contract outlining product specifications, quantities, and delivery terms.

2. Financing Request Submitted
You share the purchase order and supporting documents with Krystal for assessment.

3. Facility Structuring & Lender Selection
Krystal evaluates your requirement and negotiates with banks or finance companies to secure the most suitable Pre‑Shipment Finance facility.

4. Funds Disbursed for Production
Once approved, the lender provides financing to cover raw materials, labor, manufacturing, packaging, and logistics costs.

5. Production & Shipment
Your business completes production and ships the goods to the customer as per agreed terms.

6. Repayment Upon Invoice Settlement
After shipment, the invoice is raised. Repayment to the lender is made once the customer pays, or through a post‑shipment finance facility if required.

Documentation Requirements

· Customer purchase order or export contract

· Proforma invoice

· Production plan or cost sheet

· Company KYC documents

· Bank statements (6–12 months)

· Audited or management financials

· Supplier quotations (if applicable)

· Export licenses or permits (where required)

Krystal ensures all documentation is complete, compliant, and aligned with lender requirements to facilitate smooth approval.

C. Key Benefits of Pre‑Shipment Finance

Pre‑Shipment Finance strengthens your supply chain, enhances liquidity, and supports business growth.

· Improved Working Capital— Access funds before production begins, reducing pressure on internal cash reserves.

· Timely Order Fulfillment— Ensure uninterrupted procurement, manufacturing, and logistics.

· No Traditional Collateral Needed — Financing is typically backed by purchase orders or export contracts.

· Competitive Pricing— Lower cost compared to unsecured loans or emergency funding.

· Stronger Supplier Relationships — Pay suppliers on time and negotiate better terms.

· Higher Production Capacity — Take on larger orders and expand into new markets with confidence.

· Flexible Structures— Facilities can be tailored to specific orders, customers, or seasonal cycles.

· End‑to‑End Support — Krystal manages lender coordination, documentation, and compliance.

D. Who Should Use Pre‑Shipment Finance?

Pre‑Shipment Finance is ideal for businesses that need liquidity to fulfill confirmed orders, especially when operating on credit terms or managing large procurement cycles.

Industry Sectors

· Manufacturing & Industrial Production

· Oil & Gas Equipment & Services

· Construction Materials & Contracting

· FMCG & Consumer Goods

· Textiles & Garments

· Electronics & Appliances

· Automotive Parts & Machinery

· Food & Beverage Processing

· General Trading & Export Houses

Company Profiles

· SMEs with confirmed purchase orders

· Mid‑sized companies scaling production

· Exporters fulfilling international contracts

· Large enterprises with recurring procurement cycles

· Businesses with long receivable periods (60–120 days)

Geographic Coverage

Krystal supports businesses across:

· GCC: UAE, Saudi Arabia, Qatar, Oman, Bahrain, Kuwait

· Asia: India, China, Singapore, Hong Kong

· Africa: Kenya, Nigeria, Ghana, South Africa

Common Use Cases

· Funding raw materials and components

· Financing labor and manufacturing costs

· Covering packaging, quality checks, and logistics

· Supporting large export orders

· Managing seasonal production spikes

· Ensuring timely delivery to key customers

E. Eligibility Criteria

Pre‑Shipment Finance is accessible to a wide range of businesses, with requirements varying by lender. Krystal helps clients meet these criteria and secure the most suitable facility.

Typical Requirements

· Minimum Annual Revenue: USD 10M+

· Operational History: At least 1–2 years in business

· Confirmed Purchase Order: From a reputable, creditworthy customer

· Financial Stability: Acceptable credit profile and banking history

· Documentation: Trade license, financial statements, bank statements, supplier details

· Compliance: Valid export/import licenses where applicable

Krystal also supports businesses with limited credit history by leveraging strong customer contracts, supplier relationships, and alternative financing partners.