Usance

Usance is a term used in international trade to refer to the period of time between the date of a bill of exchange and the date on which it is due for payment. The usance period is typically 30, 60, or 90 days, but it can be longer or shorter depending on the agreement between the buyer and seller.

Usance is important because it allows the buyer to have time to pay for the goods or services that they have purchased. This can be helpful if the buyer does not have the cash on hand to make the purchase immediately. However, it is important to note that the buyer will typically have to pay interest on the amount of the bill of exchange during the usance period.

Usance can also be used to protect the seller in the event that the buyer does not pay for the goods or services. If the buyer does not pay for the goods or services by the due date, the seller can typically demand payment of the full amount of the bill of exchange, plus interest.

In addition to international trade, usance is also used in other types of financial transactions, such as loans and mortgages. In these cases, the usance period refers to the length of time between the date on which the loan is made and the date on which it is due for repayment.