Letters of Credit

Reduce the risks associated with making or receiving payment for goods

 

Importers

Key Benefits

  • Able to control terms and reduce risk
  • Can predict cash flow and price goods accurately
  • Can negotiate for better terms
  • Can obtain extended credit by having tenor LCs

 

 

 

 

 

 

 
   

Exporters

Key Benefits

  • Payment assured without affecting own bank limits
  • Enhanced competitiveness
  • Predicted cash flow
  • Exporter may save costs of other credit insurance
  • Access to local help and advice
  • Country risk eliminated by an accepting bank in exporter's country

Key Features

  • Letters of Credit issued by importer's bank
  • Credit terms and currency of payment may be negotiated
  • Credit may be confirmed by a bank in the exporter's country
  • Known payment date and revenue
  • Letters of Credit can provide for payment at sight or tenor (deferred payment, say 30, 60, 90 or more)
  • Customer instructs own bank to issue Letter of Credit and also to specify terms
  • Credit terms, price and currency of payment may be negotiable

 

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For more details on our Trade Finance Tools contact your Banker here>>.