Packing credit limit calculator (EPC / PCFC)
Assess the pre-shipment finance an exporter needs: the cost of the export orders the bank funds, spread over the production cycle. Figures in ₹ lakh.
Packing credit limit with this bank
Cycles = Days in a year ÷ Cycle days. Pre-shipment eligibility = Cost of goods for the funded exports ÷ Cycles. Packing credit is normally given for up to 180 days and must be repaid from export proceeds.
This calculator is for learning. Banks apply their own policies, margins and benchmarks, so treat the result as a guide, not a credit decision.
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What packing credit funds
Packing credit is pre-shipment finance: money an exporter needs to buy raw material, make the goods and pack them for shipment. Banks give it in rupees as an export packing credit (EPC) or in foreign currency as pre-shipment credit in foreign currency (PCFC). It is repaid from the export proceeds or by converting it into post-shipment finance once the goods are shipped.
Packing credit is normally given for up to 180 days, matched to the actual production cycle, and must be backed by export orders or letters of credit.
How to use this calculator
- Enter the projected exports for the next 12 months.
- Enter the exporter's margin and any advances from buyers: these reduce what the bank funds.
- Enter the cost of goods (purchases or production cost) for the exports the bank funds.
- Enter the cycle: days from order to shipment, including lead time.
- Deduct any packing credit from other banks.
The formula
- Exports funded by the bank = Projected exports − Margin − Advances
- Cycles in a year = Days in a year ÷ Cycle days
- Pre-shipment eligibility = Cost of goods for the funded exports ÷ Cycles
- Limit with this bank = Eligibility − Packing credit from other banks
The limit is based on cost, not export value, because pre-shipment finance pays for making the goods; the exporter's profit is realised only on export.
Worked example
Projected exports of ₹1,000 lakh, a 10% margin (₹100 lakh) and ₹300 lakh of buyer advances leave ₹600 lakh of exports for the bank to fund. Their cost is ₹480 lakh, and the cycle is 90 days:
- Cycles in a year: 360 ÷ 90 = 4
- Pre-shipment eligibility: 480 ÷ 4 = ₹120 lakh
- Less ₹50 lakh with another bank: limit ₹70 lakh
For finance after shipment, see the post-shipment finance calculator.
Frequently asked questions
Why use 360 days? It is a common convention in trade finance. Use 365 if the bank prefers; the difference is small.
What else does the bank look at? Past export performance, confirmed orders or LCs, the buyers and their countries, ECGC cover and how earlier packing credits were repaid.
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