Acceptance Loans or Banker’s Acceptance…

Acceptance loans, and banker’s acceptance, or BA, also called bank bills, are business-to-business short-term notes, similar to post-dated checks that are guaranteed by a commercial bank. Acceptance loans or bank bills, have a maturity of about 30 to 180 days, and are paid on that date, according to Investopedia.

With the use of acceptance loans, a buyer can purchase goods by providing a seller with a bank bill that will be paid by the bank at a future date. Before the note matures the banker’s acceptance loan can be sold to a third party for the face value minus a discount, or BA rate. In so doing, the seller can receive his money faster, and the third party can earn in a way similar to a money market account, explains Financial Times.