Documentary letters of credit are mostly used in international transactions, where the buyer and seller have yet to establish a strong relationship and/or operate in different countries. When concluding a deal with a buyer from a different country, the seller is exposed to risks due to the physical distance between the two parties, foreign or unknown legal systems, and lack of knowledge about the buyer. A seller may be hesitant to enter such a risk-sensitive deal without a letter of credit as financial security.
How does Letter of credit works
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– 4 - 8% TOTAL Bank fees for LC issuing – up to $5 000 000 maximum LC amount – from 45up to 365 days possible expiry period – No cash cover needed Without opening an account or depositing money
Client needs to confirm LC draft with his Seller (Seller's bank).
To issue SWIFT we need a trade license of the Client's company, Share holders List, Passport copy of main applicant.
Next the draft is finally agreed and it is confirmed that the bank is going to issue SWIFT of LC to the Seller's bank.
– At least 6 months Activity of the company – From $100 000 Minimum LC amount – Import contract or invoice Having a valid supply contract with a Supplier
A Documentary Letter of Credit is a guarantee from the issuer (i.e. issuing bank) to the beneficiary that the issuer will pay the beneficiary money when the beneficiary provides certain documents to the issuer in a certain manner time and place.
We have our company money deposited and lines opened in the banks, into our company's accounts. This is the reason why our clients are not requested for DEPOSIT of a big amount in the bank for LC opening.
Fill out and send us a request for a documentary letter of credit orstandby letter of credit (sblc) using our online application.
Our staff builds the sblc/lc draft. The client confirms and signs the final version.
Our client compiles several requested documents relating to its company. It scrutinizes these documents to ensure the deal complies with all international regulations.
Business Active issues its client's LC though the agreed-upon issuer. We monitor the instrument carefully to ensure that it gets to the beneficiary.