As an exporter you need to ensure as much as possible that payment for your goods will be received promptly and with the minimum amount of risk. This can often be achieved by using a Documentary Letter of Credit (also known as just ‘L/C’), a method of payment intended to protect both the buyer and the seller.
In short, the process is that the buyer applies to a bank, usually in the country of import, and asks them to issue a Letter of Credit in favour of the seller. Once issued, this provides the seller with a conditional guarantee of payment given to them by the Issuing Bank. As long as the seller is able to comply with all of the L/C terms and conditions (which should be agreed between the buyer and seller before issuance of the L/C) the Issuing Bank will make payment within the agreed timescale.
Although they can often seem daunting and complicated to deal with, we can take away the pain, and can provide specialist assistance throughout the whole process, including:
Follow up with the bank to ensure that payment is made within the timeframe specified on the L/C.
For help and advice on all aspects of Letters of Credit, please contact us on 0113 271 1555
All business is carried out under the current BIFA standard trading terms and conditions which are available upon request.