A method of providing immediate cash for a UK exporter of goods. On shipment of the goods the exporter draws a bill of exchange on the foreign buyer. The accepted bill is then pledged to a merchant bank in London, which accepts an accommodation bill drawn by the exporter. The acceptance can be discounted on the bank's reputation, to provide the exporter with immediate finance, whereas the foreign buyer's acceptance would be difficult, or impossible, to discount in London.
Subjects: Financial Institutions and Services.