Letter of Credit - a time-tested financial instrument
14 June 2019
Dear customers, do you want to buy goods or export goods / services, but do not know your counterpart?
Letter of Credit - is a convenient way to calculate the insurance of trade relations between the parties, which are either in different countries or enter into a contract for the first time.
A letter of credit allows you to solve several problems at once:
- Payment guarantee - the buyer's bank guarantees payment to the seller through the seller's bank.
- The guarantee of timely receipt of money - the exporter receives the money on time. The exporter receiving the expected amount on time, can plan their business activities flexibly, without losing time.
- Minimizing loan risk - in trade, the distance between counterparties is very large, and finding out the buyer's creditworthiness is a serious threat. In a letter of loan mode, such a risk can be avoided.
Learn more here