Acceptance House

Guarantees payment of trade bills used to finance trade deals and goods in shipment

REMARKS

It "accepts" the bills by agreeing to pay the bill at a discounted rate at a specific future date.

Its profit is the difference between the discounted amount it guarantees to pay and the full amount of the trade bill that it undertakes to collect from the original creditor.

Institutions which specialise in accepting (i.e. guaranteeing) bills of exchange. Sometime used as a name for the merchant banks.

A large number of city institutions can be referred to as'merchant banks' but only a few can be described as 'acceptance houses'.

Acceptance houses belong to the Accepting House Committee.

They have a close association with the Bank of England.

They guarantee that they will be able to get Sterling in exchange for a Bill of Exchange.

These houses carry out a wide range of other services, including raising loans, dealing in foreign exchange, managing new issues.