Buyer's credit and seller's credit are two forms of export credit. Although there is only one word difference between them, they are very different.

Difference 1: The borrower is different

The borrower of the buyer's credit is the bank entrusted by the buyer; The borrower of the seller's credit is the seller.

difference 2: the guarantee method is different

the buyer's credit is that the borrowing bank signs a loan agreement with The Export-Import Bank of China, and the third financial institution guarantees it; Seller's credit refers to the repayment guarantee or letter of credit issued directly to the seller by the bank entrusted by the buyer according to the general contract of the project.

Difference 3: Different payment methods

Buyer's credit is a cash item for the seller; The seller's credit is the installment payment under the general project contract.

Difference 4: Different risks

There are interest rate risk, exchange rate risk and foreign exchange collection risk in seller's credit; Buyer's credit does not have these risks for the seller, and even if these risks exist, it will have little impact on the enterprise.

Difference 5: The impact on the financial status of the enterprise is different

The seller's credit is a long-term debt of the contracting enterprise, and it is necessary to find a reputable enterprise as a loan guarantee, so the enterprise is under great pressure; The buyer's credit does not have these problems.

difference 6: the degree of control over the project is different

after the financing conditions, commercial terms and technical terms of the seller's credit are determined, the seller will sign the general contracting contract with the owner naturally; The buyer's credit has the possibility of public bidding by the buyer.

Note: Buyer's credit refers to loans provided by the exporter's bank to foreign importers or importers' banks; Seller's credit is a commercial loan provided by the exporter's bank to domestic exporters.