|Accepting house or Acceptance house|
A financial enterprise whose principal function lies in facilitating the negotiation of bills of exchange either by accepting them or guaranteeing them. The main offices of lese houses are situated near the central bank and other institutions concerned with the smooth running of the country's financial system. They have in modem times come very much like merchant banks and usually operate as such. Most are members of the accepting houses committee. which was established to ensure maximum collaboration between them and generally to oversee their business. Today, these houses also hold a large portion of the country's sterling balances. The signature of an established accepting house on a bill of exchange is a sign of the reliability of that bill and will enable the holder to discount it at the most favourable rates. In their modern role of merchant banks they also add speed to international trade by lending money to an exporter on a trade bill, thus bridging the gap between the release of goods and payment by the foreign buyer. Such a loan is sometimes referred to as an 'acceptance credit'.
|Reference: The Penguin Business Dictionary, 3rd edt.|