Merchandise Loan Facility
Merchandise refers to a specific product or group of products or goods manufactured or acquired by a trading business for the purpose of sale and or for own use in production facility as raw materials or inputs.
Merchandise Loan is a short-term credit facility provided by the Bank against the merchandise or documentary evidence (valid warehouse receipts for goods in the warehouse, original railway receipts or truck-way bills, or airway bills for in-transit merchandise items).
The purpose of Merchandise Loan Facilities is to relieve the customer from cash-flow problems arising from money being tied up in the merchandise.
Types of Merchandise Loans
Coopbank avails three types of merchandise loans, Revolving Merchandise Loan, One-time Merchandise Loan, and Merchandise Loan Against Warehouse Receipts or Important Documents.
- Revolving Merchandise Loan: – Revolving merchandise loan is a type of merchandise loan in which the borrower is allowed to use up to the limit set by the bank for a specific period. It is renewable subject to proper utilization of the facility. It has to show adequate turnover and swing. In the case of revolving merchandise loan, the bank encourages releasing of the merchandise items be based on the principle of first-in first–out.
- One-time Merchandise Loan: – A one-time merchandise loan is a type of merchandise loan availed only for a specified period, usually up to one year.
- Merchandise Loans against Import Document; – Exceptionally availed against goods in transit supported by import documents to its prominent customers. In such cases, a complete set of documents such as bills of loading, truck/air/rail waybills, commercial invoices, certificate of origin, insurance certificate, packing list, and other related documents should be submitted to the bank