LIM: This type of finance is offered to the importer to finance their needs for meeting the cost including freight, insurance, and customs and excise duty payable on the imported merchandise. The lending bank mostly pledges the imported goods. The merchandise is released for the use of the importer (borrower) upon repayment of the bank’s finance and charges either fully or partially, on production of the Delivery Order issued by the banker in favor of the borrower.)
LTR: Trust Receipt (TR) is a type of
short-term import loan to provide the buyer with financing to settle goods imported under Letter of
Credit where title of
goods is
held by the bank. Under a TR arrangement, the Bank retains title to the goods but allows the buyer to take possession of the goods on trust for resale before paying the Bank on TR due date. TR financing is applicable to goods imported under
documentary credit.