Usance

Usance refers to the specified period, usually in days, allowed for payment of a bill of exchange or letter of credit following its presentation.

In international trade, usance periods differ. For example, 30, 60, or 90 days are common. European nations often follow a 30-day usance, while Asian counterparts may use up to 90 days.

Banks and financial institutions frequently set unique usance terms, impacting import and export transactions. Letter of credit terms, including usance days, significantly influence cash flow and trading efficiency.

Usance is critical for managing the timing of international payments. It ensures sellers receive payment over a fixed period, enhancing predictability in commerce.