What is the difference between pre-shipment and post-shipment finance?

Pre-shipment finance provides working capital to exporters before goods are shipped. It is used for purchasing raw materials, processing, packaging, warehousing, and transporting goods to the port. Post-shipment finance, on the other hand, is provided after the goods have been shipped and is used to bridge the gap until payment is received from the overseas buyer. Both types of finance help exporters manage liquidity and ensure smooth operations, but they address different stages of the export process. Pre-shipment finance supports production and preparation, while post-shipment finance manages cash flow after dispatch.