TradeMore supports businesses that require documentary Letters of Credit for genuine import, export and supply transactions. An LC can help bridge the commercial gap between a buyer that wants payment linked to documentary conditions and a supplier that wants stronger payment assurance.
We review the underlying sale, payment terms, shipment, required documents, countries and banking requirements before identifying a suitable structure.
What This Solution Is
A documentary Letter of Credit is a bank undertaking under which payment is made according to the credit terms against a complying presentation of specified documents. Credits commonly incorporate ICC UCP 600 rules. The LC should reflect the commercial contract accurately, including amount, expiry, shipment terms, presentation period and payment tenor.
Common Business Use Cases
Import purchases where an overseas supplier requests an LC
Export sales requiring documentary payment assurance
Sight LC transactions
Usance / deferred-payment LC transactions
Transactions requiring advising or confirmation, where available and appropriate
How It Works
1. Share the proforma invoice or contract, supplier/buyer details, value, goods, countries and payment terms.
2. TradeMore reviews the commercial transaction and documentary/banking requirements.
3. The LC structure, tenor and required process are identified.
4. Following approval and completion of requirements, execution is coordinated through the relevant network.
What We Need to Review
Company profile and KYC documents
Underlying contract, purchase order, proforma invoice, tender or other transaction document
Transaction value, currency, countries and counterparties
Exact required instrument/solution and purpose, if already known
Requested wording, bank requirements and deadline, where applicable
Frequently Asked Questions
What is the difference between Sight and Usance LC?
A sight LC is payable on the sight basis after a complying presentation, while a usance/deferred LC provides payment at an agreed future tenor.
Is LC the same as SBLC?
No. An LC is commonly an active documentary payment mechanism, while an SBLC generally stands behind an obligation.
Can the LC wording be changed?
Amendments may be possible subject to the parties and banks involved. It is better to structure the credit correctly before issuance.
What documents are normally required under an LC?
The credit may require commercial, transport, insurance, certificate or other documents depending on the trade. The exact list is transaction-specific.
Discuss Your Requirement
Every transaction is different. TradeMore reviews the commercial requirement, parties, documentation, eligibility and compliance considerations before identifying an appropriate structure. All solutions are subject to assessment, due diligence and applicable financial institution requirements.