Buyer Wants 90-Day Credit? How to Say Yes Safely (2026)

The Tuesday-morning answer — yes, but on your structure

A good buyer asks for 90 days. It is the most normal request in international trade — credit is standard in their market, and asking costs them nothing. The exporters who lose money on 90-day terms are rarely the ones who said yes. They are the ones who said yes at the cash price, on the buyer's paperwork, with no cover and no funding plan — and thereby financed their customer's working capital for a quarter, for free.

Saying yes safely is a sequence, not a decision: check the buyer, price the loan, insure it, limit it, fund it. Each step is cheap before shipment and expensive after. This post walks the sequence in order.

What 90 days actually costs you

A 90-day term is a loan. You ship the goods, the buyer sells them, and your money funds their inventory for a quarter. That money has a cost whether or not anyone invoices you for it — your own working capital, your credit line, or both. The exporters who get this wrong do not miscalculate; they never calculate.

Add the layers and the industry rule of thumb lands where the trade press puts it: moving from 30-day to 90-day terms typically adds 1.5–2.5% to the all-in cost of the receivable once working capital, hedging and insurance are all counted. On a 5% net margin, an unpriced 90-day term quietly hands nearly a third of the profit to the buyer's treasury. The arithmetic takes five minutes. Do it before you agree, because credit terms set a precedent — the 90 days you grant on the first order becomes the floor for every order after it.

Quote two prices — put the term in the price

The fix is structural, not adversarial. Quote a cash price and a 90-day price, side by side, and let the buyer choose. The cash price is lower. The 90-day price carries the uplift. The buyer sees the choice clearly, the cost sits where it belongs, and you never have to argue about margin after the fact — the term was priced when it was granted.

• Compute your uplift from your own cost of capital, not a round number: annual rate × 90/365, plus insurance and hedge. At 8%, the capital piece alone is about 2% — then add the rest.
• Write the tenor trigger into the quotation in plain words — 90 days from bill of lading date, from shipment, or from acceptance — because most disputes are about when the clock started, not how long it runs.
• Confirm the trigger matches what your bank and your insurer will price: the transit period sits on top of the commercial tenor, and all three parties must be counting from the same date.
• Offer the buyer a funded alternative in the same quote: a smaller deposit plus balance against documents, or an LC at the cash price. Many 90-day asks evaporate when the buyer sees the 90-day price next to a cheaper secured option.
• Never grant the first 90 days on open account to a buyer with no payment history. The ladder runs advance or LC first, documentary terms next, open account only after the buyer has paid on time.

Cover first — insurance and limits before the proforma

Insurance is the step exporters schedule last and need first. Commercial-risk cover on a buyer only responds if a credit limit is approved on that buyer before shipment — a revolving per-buyer limit the insurer sets from its own assessment of the buyer's creditworthiness, valid across shipments as long as dispatches continue. Ship first and apply later, and you may have paid premium for nothing.

• Ninety days fits inside standard cover: whole-turnover policies cover cash exports with credit periods up to 180 days, so a 90-day DA or open-delivery term is well within scope.
• Apply for the buyer-wise limit as soon as the 90-day ask lands — the insurer's assessment takes time, and the proforma should not go out before the limit comes back.
• Where no specific limit is approved, standing discretionary limits apply: policy wordings quote ₹40 lakh for DP/CAD terms and ₹20 lakh for DA/open delivery, each capped at two claims, with higher reference limits where you hold prior shipment history with the same buyer on identical terms ⚠️.
• Any extension of a DA bill's due date, or any conversion of DP to DA, needs the insurer's prior approval plus additional premium — diary this before day 90, not on it.
• Check the buyer's adverse-notice status before every new exposure, and the country's cover bucket: restricted-cover markets need specific per-shipment approval regardless of your buyer limit.

Finance the gap — who funds 90 days

Pricing the term and funding the term are two different jobs. The quote protects your margin; the bank facility protects your payroll. Ninety days of receivables across overlapping orders is a permanent working-capital hole, and it needs a sanctioned facility behind it — not optimism.

Two quiet rules decide whether the funding actually behaves. First, the refund rule: where discount interest was collected upfront through the notional due date, the excess from the actual realisation date must be refunded to you — reconcile every bill's interest debit against its realisation date, because early-paying buyers literally earn you money back. Second, the subvention: under the 2026 Export Promotion Mission framework, MSME exporters can access 2.75% per annum interest subvention on pre- and post-shipment rupee export credit, capped at ₹50 lakh per IEC per year, with EXIM Bank as implementing agency from April 2026 — scheme terms move by trade notice, so confirm current eligibility rather than quoting around it ⚠️.

The FX half — 90 days of rate risk

Ninety days of credit is also ninety days of currency exposure. A 2–3% adverse move can erase a large chunk of a thin margin, and the longer the tenor, the more room the rate has to move against you. Price a rate buffer into the quote — a few rupees below spot on long-tenor orders — and hedge the receivable itself.

• Book forwards to the payment date, not a round tenor: match the contract maturity to the actual due date including the transit period, because a 60-day forward on a 90-day receivable leaves a month unhedged.
• Hedge 70–80% of confirmed receivables, never everything — quantity and timing uncertainty mean a 100% hedge can become a speculative position if the order slips.
• Use an option-dated forward (a settlement window, e.g. day 80–100) when the buyer's payment timing is fuzzy; it costs slightly more and saves rollover charges later.
• Book only genuine exposures through an authorised dealer bank, and compare spreads across banks — even 10–20 paise per dollar is material on a large invoice.
• Set a budget rate for the year and hedge in slices whenever the market meets it, rather than hedging each invoice in isolation.

When to say no — or step back to an LC

The strongest part of a 90-day policy is the refusal criteria, written down before the order arrives. Refuse — or step the buyer back to a confirmed LC — when the buyer is new, when the order is large relative to your turnover, when the tenor plus your production cycle exceeds what you could fund twice over from own working capital, or when the country carries transfer or political risk you cannot insure around.

Offer the step-back as a path, not a rejection: first order on advance or LC, documentary terms as history builds, 90-day open account once the buyer has earned it. Each step is earned rather than granted — and step back down the ladder the moment a payment slips, because a late payment is the cheapest possible warning that a limit is wrong.

Tell trad your buyer and tenor

The fastest eligibility answer needs three facts: the buyer and country, the tenor being asked, and the order value. With those, trad checks which structure fits — secured first order, insured 90-day terms, or a funded bridge — against live buyer-market financeability, not generic advice.

Frequently asked questions