Best Export Finance companies to help Indian businesses grow globally

The world is your market, and the easiest way to grow and scale your business and tap into billions of new customers is to export. However, this potential is gated by two factors: timing and financial management.

When you ship goods across borders, you have to bear the costs immediately, but the payment from your customers comes in much later. This timing gap can impact your working capital and slow down your production and exporting cycles. Export finance is a tool that helps you bridge this timing gap by offering you the funds you need to keep your operations running before payments from abroad reach you.

Let’s take a closer look at export finance, how it works and what options are available to you as an Indian exporter.

Export finance is a unique type of trade finance or loan that gives you liquidity as an exporter. It gives you access to working capital at various stages of your export cycle and can help you cover costs like sourcing raw materials, manufacturing and shipping. It consists of several financial instruments like loans, monetisation and risk mitigation tools to bridge the gap between when you ship across borders and when you receive payment for it.

In international trade, your export cycle is a lot longer than it is in domestic trade. This can lead to a liquidity strain as you would have to bear the costs of manufacturing and shipping goods and then wait for your buyer to complete payment. Payments might take anywhere between 30 to 120 days.

Export finance helps you manage this extended cycle in the following ways:

1. It bridges your working capital needs and provides funds to cover production and procurement costs before you ship.
2. Supports order executions and prevents disruptions due to a lack of cash flow, especially when you are handling multiple orders in parallel.
3. Absorbs long credit periods that buyers usually demand without putting the pressure of meeting daily cash requirements on you.
4. Improves payment certainty through instruments like export LC and bill discounting.
5. Reduces your dependency on internal reserves and short-term borrowing.

Export finance is classified based on when in your export cycle you need funding. Based on this, export finance is divided into two categories: pre-shipment finance and post-shipment finance.

​

Pre-shipment finance supports exporters before goods are shipped. It helps you fund your production and preparation activities related to a confirmed order.

​

Some commonly available options include:

1. Packing Credit: Short-term working capital provided against a confirmed export order or export LC to fund raw materials, manufacturing, and processing.

2. Export LC-backed Loans: Financing extended based on a Letter of Credit that is issued by the buyer’s bank.

3. Advance Against Export Orders: Funds are released after verifying your export contract. It allows you to begin production without waiting for previous payments.

4. Rupee or Foreign Currency Packing Credit (PCFC): This is credit extended in INR or foreign currency, depending on cost structure and FX exposure.

​

Post-shipment finance applies after goods or services have been shipped. It covers the waiting period until you receive payment from the buyer.

Some post-shipment tools include:

1. Bill Discounting: This tool provides immediate funds against export bills or usance bills before you receive payment from the buyer.

2. Export Factoring: This allows you to sell your export receivables to a factoring company for upfront liquidity and collection support.

3. Invoice Financing: Short-term funding against unpaid export invoices without selling the receivable.

4. Negotiation or Purchase of Export Bills: Here, your bank advances funds after verifying shipping documents.

The main difference between pre-shipment and post-shipment finance is in timing, purpose and risk coverage.

Pre-shipment finance is used before shipment to fund your production-related expenses. It helps you accept large orders and maintain your production schedules, while also avoiding cash flow strains. This type of financing can work well if your upfront costs are higher and your buyer will pay only after shipment.

​Post-shipment finance is used after shipment, and it gives you liquidity while you wait for the buyer's payment. It reduces the impact of long credit periods and helps you reinvest your capital into new orders without waiting for receivables to clear.

Here are the major differences at a glance:

Now, when discussing export finance, two terms that usually come up are export factoring and invoice financing. The reality is that export factoring is a specific form of invoice financing, both of which fall under post-shipment finance and are used to unlock cash from unpaid export invoices.

Invoice financing is the broader category where you receive funding against outstanding foreign invoices while you continue to manage buyer collection. Export factoring sits within this category and goes a step further by allowing you to sell your receivables to a factor, who then handles collections and may also absorb buyer default risk.

​

Documentation required for export finance

The documents you would need for pre-shipment and post-shipment financing are different from one another.

​

Documents for pre-shipment finance

For pre-shipment finance, you need documents that help you prove that you have a confirmed, legitimate order that needs to be financed for production. Here’s what you would need:

1. Confirmed export order or contract

2. Letter of Credit from the buyer’s bank.

3. Proforma invoice sent to buyer

4. An Undertaking declaration by the exporter stating that goods will be shipped by the due date.

5. Security documents like the hypothecation agreement for raw materials.

​

Documents for post-shipment finance

These are the documents you’d need if you are looking for financing once shipping is complete.

1. Commercial invoice and packing list

2. Bill of Landing or Air Waybill. This would be the primary security of the loan.

3. Shipping bill or Bill of export.

4. Bill of Exchange

5. Certificate of Origin

6. Cargo Insurance policy

7. FEMA declaration

Export finance in India is delivered through a mix of public institutions, private lenders, and digital-first platforms. Let’s look at each type of provider:

​

1. Banks and government-backed institutions

Banks and government-backed institutions form the foundation of India’s export finance ecosystem. They primarily support exporters through structured, regulation-led financing and long-term trade promotion. These institutions typically serve large exporters, project-based trade, and businesses with established credit histories.

These include:

• EXIM Bank
• ECGC
• SBI
• HDFC Bank
• ICICI Bank
• Canara Bank

2. NBFCs focused on trade finance

NBFCs address gaps left by traditional banks, particularly for MSMEs and fast-growing exporters. They offer transaction-linked financing with relatively flexible eligibility criteria and faster turnaround times.

Some options available include:

• Drip Capital
• Tata Capital
• Bajaj Finance
• Ugro Capital
• Credlix (by Moglix)

3. Fintech platforms for exporters

Fintech platforms focus on speed, automation, and access. They use technology-driven underwriting and digital workflows to support exporters who need quick liquidity and streamlined compliance.​

Some examples include:

• KredX
• M1xchange

You have to align your cost expectations, speed requirements, risk exposure, and business model with the right type of institution. Here’s a comparison of the top finance options available to you as an Indian exporter:

Even a strong export order can turn stressful if the funding structure does not match how international trade actually works. While traditional export finance through banks has supported exporters for decades, it often struggles to keep pace with the realities faced by growing Indian businesses. Here’s why:

​

1. Collateral-heavy lending models

Traditional banks usually treat export finance as a standard loan rather than a transaction-backed facility. As a result, you may be asked to pledge your fixed assets, such as land, factories, or personal property. If your business is asset-light, this can cause a roadblock even if your export order is strong.

​

2. Inflexible credit limits

Most traditional banks set export limits annually. If you receive a sudden large order or enter a new market, scaling your finances can quickly become difficult. This means you could be forced to delay your growth opportunities.

​

3. Exporter bears the buyer risk

In many traditional post-shipment facilities, financing is offered on a “with recourse” basis. So, if your overseas buyer delays payment, defaults, or becomes insolvent, the bank can recover the funds from you. This places the full burden of international credit risk back on you, even after goods have been shipped.

Choosing the right export finance solution requires looking beyond interest rates and focusing on how well the product fits your trade cycle.

1. Start by assessing buyer and country risk

If you are dealing with a new buyer or an unfamiliar market, options backed by export LC or credit insurance can offer stronger payment protection. For repeat buyers with a reliable track record, factoring or invoice financing may provide more flexibility.

2. Review your cost of capital alongside speed 

Bank-led facilities may offer lower rates, especially under government interest equalisation schemes, but they often involve longer processing timelines. NBFCs and fintech platforms can disburse funds faster, which may matter more when you need to keep orders moving.

3. Consider whether balance sheet impact matters 

If you want to avoid increasing debt levels, non-recourse factoring can convert receivables into cash without adding liabilities.

4. Match the solution to your export stage

Use pre-shipment finance to fund production and post-shipment options to unlock cash stuck in receivables.

5. Factor in compliance support

A good solution should simplify RBI and FEMA requirements rather than add operational burden.

While securing the right type of export financing is what keeps your working capital flowing, it is only one of the components that make up your financial strategy. As an exporter, your final goal should not be to secure a loan but to receive payment from customers as quickly and cost-effectively as possible.

​

However, even with the best financing options, if you rely on slow, expensive and non-transparent payment rails, these negate the benefits you achieve through smart financing. This is where a dedicated solution like Xflow can offer you compelling benefits like:

​

1. Accelerated liquidity: Xflow can dramatically shorten the time from a customer initiating a payment to the funds landing in your Indian bank account through its next-day settlements.

2. Maximized realization value: Traditional platforms often embed high, non-transparent Foreign Exchange (FX) markups. Xflow, on the other hand, offers mid-market rates and also tools like the AI FX analyst so that you retain the maximum value from the payments you receive.

3. Simplified compliance: For every foreign payment, Indian exporters need a verified e-FIRA/FIRC for compliance with the RBI and GST authorities. Xflow is for the Indian market and its specific regulations. It automates the complex documentation process to give you faster, error-free compliance.

​

Reduce your dependency on financing and shift your focus entirely to international growth by ensuring your foreign customers can pay you quickly and easily.