Advance Payment Guarantee
Buyers will sometimes make an advance payment to the seller or contractor to enable them to begin acquisition or production of goods. An Advance Payment Guarantee will undertake to refund all or part of this advance payment upon the buyer certifying that the seller did not produce or deliver the goods or services.

CFR*
(Cost & Freight)
The amount includes the cost of goods and all transportation charges to the named point of destination. Risks of loss or damage are assumed by the buyer when goods cross the ship’s rail in the port of shipment.

CIF*
(Cost, Insurance & Freight)
The amount includes the cost of goods, insurance and all transportation charges to the named port of destination. An insurance policy or certificate will accompany the other documents.

Confirming Bank
If specified in the Documentary Letter of Credit, another bank – usually the advising bank – may add its commitment to that of the issuing bank to pay the beneficiary if the documentation is in order. The confirming bank then assumes the risk of the issuing bank, including the political, social and economic risk associated with the country of the issuing bank.

A confirmed Documentary Letter of Credit is often required by sellers who do not wish to rely solely on a foreign bank and who feel more comfortable knowing their "home" bank has added its commitment to that of the issuing bank.

Export-Import Bank of the United States (EXIM BANK):
This is the official export credit agency of the United States federal government. Ex-Im Bank's mission is to assist in financing the export of U.S. goods and services to international markets. Ex-Im Bank provides working capital guarantees (pre-export financing), export credit insurance, loan guarantees and direct loans (buyer financing).

EXW*
(Ex Works)
The amount includes only the cost of goods. Expenses such as inland transportation, loading and insurance will be for the account of the buyer. The full cost and risk involved in bringing the goods from the seller’s warehouse to the desired destination is also for the account of the buyer.

FAS*
(Free Alongside Ship)
The amount includes the cost of goods and all expenses relating to the delivery of goods along-side the ship on the quay or in lighters, but does not include the cost of loading on board. The buyer bears all cost and risk of loss or damage from the moment of delivery at point of loading.

Irrevocable Documentary Letter of Credit
These Credits, once established, cannot be amended or cancelled without the consent of all parties to the Credit: the applicant, issuing bank, beneficiary, and confirming bank, if any. Under U.C.P 600 (2007 revision), all credits are irrevocable unless otherwise stated.

Payables Discounting:
This is a process which allows buyers and sellers of commercial goods and services to change payment terms. The benefits include:

• allowing suppliers to control payment timing
• calculating the discount amount based on the number of days remaining until the due date
• discounts not needing to be negotiated in advance, rather they can be taken as working capital needs dictate
• trading parties can tap into an alternative source of working capital with the use of commercial banks whom pay early on behalf of the buyer

Performance Bond
As the name suggests, this type of Special Credit will undertake payment in the event of the buyer certifying that the seller failed to perform in accordance with the terms of a commercial contract or failed to perform to the satisfaction of the buyer. Payment is usually made against a certificate from the buyer stating that the seller has failed to perform.

Purchase of Accounts Receivable
This type of alternative financing by a bank or other financial institution allows for the purchase of the accounts receivable from the seller thereby providing liquidity. This program, similar to factoring, also provides the seller a stronger balance sheet structure and better management of assets.

Receivable discounting
Refers to obtaining a working capital short-term loan against the discounted value of the invoice.

Revolving Credit
Provided the Credit issued is irrevocable, it may be issued in revolving form. That is, a sum up to a stated amount will be available against special documents during a given period of time, e.g., per month. The amount available periodically may be cumulative or non-cumulative, and may depend on the customer’s credit availability. Revolving credits are frequently used by large-volume purchasers buying overseas through local agents or trading companies, which in turn source goods from a variety of suppliers.

Standby Letter of Credit used as Security for a Loan or Operating Facility
In the same way that a Documentary Letter of Credit adds the credit of a financial institution to that of a buyer, a Special Credit will achieve the same effect for a borrower, possibly in another country or another part of the same country. For example, large corporations doing business in another country, but with no corporate entity and assets in that country, will use a special Documentary Letter of Credit issued by their bank to secure an operating line in that other country.

Supply Chain Finance
Global supply chain finance refers to the set of solutions available for financing specific goods and/or products as they move from origin to destination along the supply chain. It is related to a quickly growing use of a battery of technologies and financial business practices that allow for payables discounting.

Transferable Irrevocable Documentary Letter of Credit
A Documentary Letter of Credit designated by the opening bank as transferable, which may be transferred by the first beneficiary to one or more second beneficiaries. A Transferable Documentary Letter of Credit is normally used when the first beneficiary does not actually supply the merchandise but is an agent or a broker who wishes to transfer part or all rights and obligations to the true supplier(s) as second beneficiary(ies).

Warranty Bonds
These are similar to Performance Bonds but usually cover a warranty period after completion of the contract.