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A/R Finance & Factoring Terms GLossary

What isCash Against Documents (CAD)

Cash Against Documents (CAD): In Documentary Collection (D/C or Cash Against Documents) credit providers act as facilitators for their clients by only releasing funding on proper document presentation. Cash against documents funding is a much more robust type of cash on delivery (COD) payment arrangement for import transactions.

However, CAD or D/C’s offer limited verification and recourse in the event of non-payment versus a Letter of Credit (L/C). CAD also known as Drafts are generally less expensive than Letters of Credit (L/C’s), but (as stated) typically lack their control and safety.

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