Time Draft

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Related to Time Draft: sight draft

Time Draft

A written order to pay a certain sum in money that is payable at a particular future date.

Time drafts, sometimes called time bills or time loans, are frequently used by merchants to finance the transportation of goods.


Commercial Paper.

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To expedite matters, a time draft collection procedure may be used where the draft is sent by the forfaiting bank to the buyer's bank along with the original shipping documents and instructions to release the documents once the draft has been accepted ("documents against acceptance") and, if necessary, avalized.
The first transfer involved a 72-hour time draft which was exchanged for a purchase draft.
Term options include cash in advance, documentary letter of credit, standby letter of credit, sight draft, time draft, and open account.
Typical in doing business there will continue to be open account and time drafts.

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