Differentiate between the following terms :

(a) Sight and usance draft.

(b) Bill of lading and airway bill.

(c) Pre-shipment and post shipment finance.

a. Difference between sight and usance draft :
Sight Draft :
1. It is document against sight.
2. Here, the documents are handed over to importer only against payment.
3. Payments is made immediately by the importer.
Usance Draft ;
1. It is document against acceptance.
2. Here, the documents are delivered to the importer against his acceptance of the bill of exchange for making payment at end of a specified period say three months.
3.The importer accepts the bill of exchange for making payment on maturity of the bill of exchange.

b.Difference between bill of lading and airway bill :

Bill of lading : It is document given by shipping company.

Airway Bill : It is a document given by airline company.

c. Difference between pre-shipment and post-shipment finance :

Pre -shipment finance type : This type of finance is needed by exporter to purchase raw-materials and other related items to make the goods exportable.

Post-shipment finance : Importer makes arrangements in advance to pay to the exporter on arrival of goods at the port. This is known as post shipment finance.