A letter of credit is a contractual commitment, but foreign buyers bank to pay once the exporters shipped the goods. and presents the required documents to the exporters bank as proof.

By using a letter of credit. It provides the exporters a guarantee of payment, while offers the importers reasonable payment terms.

The importer get a guarantee that the order has shipped before payment.?

The exporters should consult with their bank before the importer applies for the letter of credit.?

Ask about what type and size of export transactions are suitable for letter of credit?

How much does a lot of credit cost? who pays the fees??

How are disputes resolved between importers and exporters?

Here's how a letter of credit works, First, the exporter must be satisfied with the creditworthiness of the importer's bank.?

Once the sales agreement is completed, The importer applies to their bank to open a letter of credit in favor of the exporter. (以賣方為受益人)

The empire's bank drafts the letter of credit using the sales agreement, terms and conditions and transmits it to the exporters bank, the Exporter's bank reviews and approves the letter of credit and sends it to the exporter.

The exporters shipped the goods in the manner provided for in the letter of credit and submits the required documents to their bank, a freight forwarder may be used to assist in this process.?

The exporters bank checks the documents for compliance with the letter of credit terms and conditions. Any document errors and discrepancies must be amended and resubmitted. Once approved, the exporters bank submits the complying documents to the importers bank.?

The importers bank releases payment to the exporters bank, the importers account is debited and importers bank releases the documents to the importer to claim the goods and clear customs.?

Letters of credit are one of the most secure payment instruments available, but can be labor intensive and relatively expensive due to bank fees, they are recommended for use in high risk situations when the importers credit is unacceptable or not available. When dealing with a new or less established trade relationship or when extended payment terms are requested. The required documents are detailed and prone to errors and discrepancies. To avoid payment delays and extra fees, documents required by the letter of credit should be prepared by trained professionals. As a trade finance tool, letters of credit are designed to protect both exporters and importers, they can help you win business with new clients in foreign markets.?

A letter issued by a bank to another bank, typically in a different country, to serve as a guarantee for payments made to a specific person under specific conditions.?

Understanding Bank Debits

Anytime money is moved out of a customer's account it is recorded as a bank debit. Bank debits can also include any overdraft fees, annual account fees, or other fees associated with the management and upkeep of the bank account. Bank debits are only permitted by the account holder and any fees are legally allowed when a customer legally signs the account opening documents.

On a bank's balance sheet, deposits are liabilities; they represent a source of capital and obligations to the customer and are an asset to the customer.?

be prone to

容易 ; 可能性很大 ; 傾向于 ; 易于

prone to confirmation bias

傾向于確認(rèn)偏差

be prone to sth

傾向于 ; 有傾向的