Letter of Credit (LC, MT700)
Letter of Credit Monetize
How Does it works?
Letter Of Credit (LC, MT700)
A letter of credit, or “credit letter” is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make a payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. It may be offered as a facility.
Due to the nature of international dealings, including factors such as distance, differing laws in each country, and difficulty in knowing each party personally, the use of letters of credit has become a very important aspect of international trade.
Most secure bank instrument
How a Letter of Credit Works
First, a buyer (importer) and seller (exporter) decide to do business together. They agree on a price, quantity, and other terms, and they specify how and when the goods will be shipped to the buyer. As part of the contract, we assume that the seller requires the buyer to use a letter of credit (LC).
Why does the seller demand a letter of credit? The seller wants more confidence that the buyer will pay. Perhaps this buyer and seller have never worked together, or the order might be large enough to cause severe financial hardship if something goes wrong. For example, if the seller spends money to produce and ship goods, the seller wants to recoup those costs. The buyer might not pay for several reasons (the buyer’s assets could be seized for some reason, the buyer might go bankrupt, and so on).
The sales agreement is not part of a letter of credit. The sales agreement is between the buyer and the seller only, and the LC relies on information in the agreement, but the LC is a separate document issued by a bank.
Condition
LC Monetize Charges:
We will advance 65%-90% of the Letter of Credit face value to the client. Charges depends on discussion before proceeding.
Limit
No limit amount.
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