Trade finance tenors run for weeks and months, and the tenor sets both the cost and the risk window
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Ossiano Guides · Cost and working capital
Tenor is the time from the start of a trade finance deal to the day it falls due. A 2010 ICC and Asian Development Bank study put average tenors for short-term products between 53 and 256 days.
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01 · Definition
Tenor runs from the start of a transaction to its maturity
Every trade finance deal has a start date and an end date. The time between them is the . The end date is the , the day the money is due back. The Basel Committee on Banking Supervision notes that trade finance tenors average well under one year.
Short-term trade finance runs for weeks and months. A 2010 study by the International Chamber of Commerce (ICC) and the Asian Development Bank (ADB) put the average tenor at 79 days for import and 53 days for export confirmed letters of credit. A letter of credit is a bank's promise to pay the seller once the right documents arrive. terms, where the goods ship before the buyer pays, usually run 30 to 90 days. They are often stretched to 120.
The tenor matters for two reasons. Interest builds up for each day, so a longer tenor costs more. And the tenor is the window in which the finance provider waits to be paid, so it is also the window in which something can go wrong.
Many trade payments use a , also called a draft. It is a written order telling the buyer, or the buyer's bank, to pay a set sum. The UK Bills of Exchange Act 1882 says a bill is payable "on demand or at a fixed or determinable future time." That choice is the tenor of the bill.
A is paid on demand, as soon as it is presented. A , or time draft, is paid later, for example 90 days after sight. The buyer signs it to agree to pay on that later date. This signature is called . Under section 54 of the same Act, the person who accepts a bill agrees to pay it according to the tenor of the acceptance.
The ICC's rules for collections set the same order of events. Under URC 522, Article 6, documents payable at a tenor other than sight go to the buyer for acceptance without delay, then for payment by maturity. Letters of credit work in a similar way. Under a usance letter of credit, the bank pays later through an accepted draft or a , which is a bank's promise to pay on a future date.
02 · Average tenors
Register data put average short-term tenors between 53 and 256 days
The best public benchmark for average tenors is the ICC-ADB Register on Trade and Finance. Its report of September 21, 2010 pooled deal data from banks and estimated an average tenor for each product. The figures are from 2010, so read them as a guide to scale.
Letters of credit were the shortest. Export confirmed letters of credit averaged 53 days. A is one where a second bank adds its own promise to pay. Export and guarantees averaged 76 days. A standby letter of credit is a backup promise the seller can draw on if the buyer fails to pay. Import letters of credit averaged 79 days.
Loans ran longer, and the result depended on who carried the risk. Import loans averaged 115 days where the risk was on a company and 91 days where it was on a bank. Export loans averaged 90 days on company risk and 256 days on bank risk.
Figure 1 · Interactive
Average tenor by trade finance product
Tap a bar to see the product's average tenor in days and the risk basis.
Source: International Chamber of Commerce and Asian Development Bank, Report on findings of ICC-ADB Register on Trade and Finance, September 21, 2010, pages 9 to 14.
Newer averages are not yet public. The ICC sells the full data pack of its 2025 Trade Register. From the 2026 edition, the ICC has renamed the Trade Register the Global Trade Intelligence Report.
03 · Tenor by product
Each instrument carries its own tenor range
Each type of trade finance fits a different length of deal. The publishers of each product state its usual range.
is the sale of invoices to a finance provider. The US International Trade Administration's Trade Finance Guide says it generally does not work with foreign invoices on terms over 180 days.
goes much longer. In forfaiting, a finance provider buys the seller's right to a future payment, with no claim back on the seller if the buyer fails to pay. The same ITA guide places it in medium and long-term credit of 180 days to seven years or more, for capital goods, commodities and large projects. The Global Supply Chain Finance Forum (GSCFF) says forfaiting tenors vary from one month to several years.
Export credit insurance follows the same split. The Export-Import Bank of the United States (EXIM) is the US . Its generally covers terms of up to 180 days, and up to 360 days for farm products. Its covers credit terms of 1 to 5 years, and up to 10 years in some cases.
Finance before shipment is short too. The GSCFF describes as short term, with advances made under a facility that is reviewed each year. For , the GSCFF says the maturity date is often tied to the date the buyer will pay.
Figure 2
Tenor ranges by instrument
Each row shows the tenor an issuing body or program states for one instrument.
Sources: US International Trade Administration, Trade Finance Guide, 2022 edition; Global Supply Chain Finance Forum; Export-Import Bank of the United States, 2026; International Finance Corporation, project 50076, July 31, 2024.
04 · Tenor and cost
Cost scales with days, so the same rate costs twice as much at 180 days as at 90
Trade finance rates are quoted for a full year. You pay only for the days of the tenor. So the charge for a deal equals the annual rate, times the days, divided by the days in a year.
The length of the year is set by a . US dollar deals use : the actual days, divided by 360. The Alternative Reference Rates Committee calls it the standard in US money markets, and the Federal Reserve's H.15 release uses a 360-day year. Sterling uses , which the same committee recognizes as the norm.
Here is an example with made-up inputs. An annual rate of 6.00% costs 1.5000% for 90 days on a 360-day year. For 180 days it costs 3.0000%, twice as much. On a 365-day year, the same 6.00% costs 1.4795% for 90 days.
It works the other way too. A flat charge of 1.0000% is the same as 6.0000% a year if the tenor is 60 days. If the tenor is 180 days, it is only 2.0000% a year. So a short deal with a small charge can carry a high yearly rate. Try your own numbers below.
Figure 3 · Try it
Convert a per-tenor charge to an annual rate, and back
Pick a tenor and a day count, then enter an annual rate or a per-tenor charge to see the other.
Direction
Tenor, days
Day count
Charge for the tenor
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Annual rate
-
Cost on the amount
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Formula in words: the per-tenor charge equals the annual rate times the tenor days, divided by the base. The annual rate equals the per-tenor charge times the base, divided by the tenor days. The cost equals the amount times the per-tenor charge.
Our Research Desk used simple interest on a 360-day or 365-day year: annual rate x days / base. The rates shown are for illustration and are not Ossiano pricing.
This calculator explains the concept only. Compounding, fees and rate resets change the result on longer tenors.
Our guide to how trade finance is priced adds the base rate, the margin and fees to this picture.
05 · Tenor and payment terms
Payment terms set the tenor that finance has to cover
The finance usually lasts as long as the wait for payment. If a buyer has 90 days to pay, the seller needs cover or cash for those 90 days.
On open account, payment is usually due in 30 to 90 days and is often extended to 120 days, according to an International Monetary Fund paper from October 2017.
Longer needs are often met with short deals that are renewed. The International Finance Corporation's SUCDEN II loan finances the purchase and export of cocoa beans. It has a 1-year maturity and can be renewed each year for up to 4 years.
Big-ticket goods get longer terms, with the buyer paying part up front. EXIM's medium-term cover applies after the buyer makes a 15 percent down payment. The cover then pays out on 85 percent of the invoice value if the buyer fails to pay, over credit terms of 1 to 5 years.
06 · Ossiano view
Short tenor is the signature of trade finance
OBSERVATION 01
Weeks, then repaid
Average tenors of 53 days for export confirmed letters of credit and 79 days for import letters of credit mean trade finance turns over several times a year. Each turn is tied to a shipment and its documents.
OBSERVATION 02
Tenor follows the goods
EXIM extends farm product cover to 360-day terms, against 180 days for standard short-term cover. Forfaiting reaches seven years or more for capital goods. The goods and their sales cycle set the term.
OBSERVATION 03
Fresh benchmark data is due
ICC renamed its Trade Register the Global Trade Intelligence Report from the 2026 edition. Our Research Desk will refresh these tenor benchmarks from that report when it is published.
Summary
Tenor sets how long the money is out, what it costs and how long the risk lasts
Tenor is the time from the start of a trade finance deal to its maturity. Short-term products run for weeks and months: the 2010 ICC-ADB averages run from 53 days for export confirmed letters of credit to 256 days for export loans on bank risk. Longer products, such as forfaiting and medium-term export credit insurance, run for years.
Interest builds up by the day, so cost rises in step with the tenor. The day count, 360 or 365, sets how a yearly rate turns into the charge for the tenor.
Related guides: how trade finance is priced, the cash conversion cycle, letters of credit, bills of exchange and promissory notes, forfaiting and trade credit insurance. Instrument cards: letter of credit (usance, acceptance, deferred payment), letter of credit (sight), bill of exchange and promissory note, forfaiting, trade credit insurance, ECA-backed finance and revolving letter of credit. Every marked term is defined in our Trade Finance Glossary.
For questions on how these shifts affect existing or planned trade finance exposures, contact the Ossiano Research Desk.
Sources
- International Chamber of Commerce (with Asian Development Bank), Report on findings of ICC-ADB Register on Trade and Finance, September 21, 2010. Supports: average tenors of 79 days for import letters of credit, 53 days for export confirmed letters of credit, 76 days for export standby letters of credit and guarantees, 115 and 91 days for import loans, 90 and 256 days for export loans (pages 9 to 14).
- Basel Committee on Banking Supervision, BIS, Treatment of trade finance under the Basel capital framework, October 2011. Supports: definition of tenor; trade finance tenors average significantly less than one year (page 1).
- legislation.gov.uk (The National Archives), Bills of Exchange Act 1882, section 3, 1882. Supports: a bill is payable on demand or at a fixed or determinable future time (section 3(1)).
- legislation.gov.uk (The National Archives), Bills of Exchange Act 1882, section 54, 1882. Supports: the acceptor engages to pay according to the tenor of the acceptance (section 54(1)).
- International Chamber of Commerce, Uniform Rules for Collections (URC 522), ICC Digital Library, 1995. Supports: documents payable at a tenor other than sight are presented for acceptance without delay and for payment by maturity (Article 6).
- International Chamber of Commerce, ICC Market Commentary, Trade Register 2025, October 2025. Supports: the full data analysis pack is available for purchase.
- International Chamber of Commerce, ICC Global Trade Intelligence Report 2026, September 17, 2026. Supports: the Trade Register renamed the Global Trade Intelligence Report from the 2026 edition.
- US International Trade Administration, Trade Finance Guide: A Quick Reference for US Exporters, July 2022. Supports: factoring generally does not work with foreign receivables on terms over 180 days (page 22); forfaiting on medium and long-term credit of 180 days to seven years or more (page 24).
- Global Supply Chain Finance Forum, Forfaiting, October 31, 2024. Supports: forfaiting tenors vary from one month to several years.
- Global Supply Chain Finance Forum (ICC, BAFT, EBA, FCI, ITFA), Standard Definitions: Loan or Advance against Inventory, 2016. Supports: inventory finance tenor is short term, under a facility with an annual review.
- Global Supply Chain Finance Forum (ICC, BAFT, EBA, FCI, ITFA), Standard Definitions: Pre-shipment Finance, 2016. Supports: pre-shipment finance maturity often tied to the date the buyer will pay.
- Export-Import Bank of the United States, EXIM Export Finance Solutions Guide, March 20, 2026. Supports: short-term export credit insurance generally covers up to 180-day terms, and up to 360-day terms for agricultural products.
- Export-Import Bank of the United States, EXIM Medium-Term Export Credit Insurance, February 18, 2026. Supports: credit terms of 1 to 5 years, in some cases up to 10 years; cover of 85 percent of the invoice value after a 15 percent buyer down payment.
- International Finance Corporation, Project disclosure: SUCRES ET DENREES (SUCDEN II), project 50076, July 31, 2024. Supports: loan for the procurement and export of cocoa beans, 1-year maturity renewable annually for up to 4 years.
- International Monetary Fund, Committee on Balance of Payments Statistics, Fintechs and the Financial Side of Global Value Chains: The Changing Trade-Financing Environment (BOPCOM 17/21), October 2017. Supports: open account payment usually due in 30 to 90 days, often extended to 120 days.
- Alternative Reference Rates Committee, SOFR "In Arrears" Conventions for Syndicated Business Loans, July 22, 2020. Supports: Actual/360 as the standard US money market convention; Actual/365 as the norm for sterling (Daycount section, page 3).
- Board of Governors of the Federal Reserve System, Selected Interest Rates (Daily), H.15, September 29, 2026. Supports: money market series annualized using a 360-day year (footnote 3).
- Ossiano Research Desk, worked example (tenor annualization, 60, 90, 120 and 180 days on 360 and 365-day bases), October 1, 2026. Supports: every calculated figure on this page, from illustrative inputs.
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