2 Usance. Available by the acceptance of a bill of exchange drawn by the beneficiary and payable at a fixed or determinable future date.

Acceptance is made by the negotiating or issuing bank when documents are presented in order and the accepted bill is handed back to the beneficiary. As a term bill, it cannot be paid until its maturity date but the fact that it has been accepted by a bank means that it can be discounted by the beneficiary for cash. Usance credits enable the importer to obtain credit, generally for a maximum of 365 days, but it must be stressed here that many importers cannot obtain credit on their own standing; the intervention of a bank offering the exporter guaranteed payment will often persuade him to agree to delayed settlement.
It is not difficult to imagine the situation where an exporter is considering entering into a contract with a foreign buyer and expects to be paid at sight. For a sight settlement, he may be prepared to use a D/P collection, but if the buyer then requests credit, the risk to the exporter changes immediately. Rather than grant credit direct to the buyer, he will demand a usance irrevocable credit under which he knows payment is guaranteed by a bank. That way, the exporter is secured and the importer gets his credit, although he will have to bear the issuing bank’s charges.