📄 Banker’s Acceptance
US Capital Private Bank Knowledge Base
📖 What is a Banker’s Acceptance?
A Banker’s Acceptance (BA) is a form of credit created when a bank accepts a time draft typically drawn on the bank by a seller of goods. By accepting the draft, the bank guarantees payment of the face amount at a specified future date, usually six months or less after acceptance.
⚙️ How Does it Work?
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The seller draws a time draft on the buyer’s bank.
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The bank accepts the draft, thereby agreeing to pay the amount at maturity.
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The seller can sell the Banker’s Acceptance at a discount to receive immediate funds before the maturity date.
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The BA serves as a negotiable instrument, backed by the bank's creditworthiness.
💡 Why Use a Banker’s Acceptance?
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To provide sellers with immediate liquidity.
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To facilitate international and domestic trade financing.
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To reduce risk for sellers by relying on the bank’s promise to pay.
📚 Related Terms
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Time Draft: A written order to pay a specified sum at a future date.
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Acceptance: The bank's formal agreement to pay the draft at maturity.
📞 Contact US Capital Private Bank
📧 Email: [email protected]
🌐 Website: https://uscapitalprivatebank.com