Work out pre shipment finance limit instantly with clear inputs, formula shown and shareable results.
The pre-shipment limit is sized on one production cycle's worth of turnover, since the facility revolves as each shipment liquidates the previous drawing. A longer cycle needs a larger limit for the same annual turnover.
Pre-shipment limit
Limit = (turnover / cycles per year) × advance rate × (1 - margin)
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.
Because the facility revolves. Only one cycle is outstanding at any time if shipments are on schedule.
Slow procurement, long manufacturing lead times and delayed documentation all extend it and increase the limit needed.