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Export letters of credit

Receive payment for your exported goods while covering your trade risks

Get a guarantee of payment before you commit to sending goods.

Key features

  • Conditional payment guarantee issued by your buyer’s bank and advised to you by us
  • Requesting Barclays to ‘confirm’ the Letter of Credit provides protection against payment default by the overseas bank or country
  • Finance can be provided for the period between presentation of compliant documents and the date on which payment is due
  • Securing a known payment date, currency and amount will assist your cashflow management
  • There is a reduced need for separate credit insurance and/or country risk insurance
  • Payment can be received for any amount and in any freely traded currency on delivery of compliant documents or on a fixed or determinable future date

How it can help your business

A Letter of Credit lets you receive payment for your exported goods while covering your trade risks.

Improves cashflow management

After you’ve presented complying documents, we can provide finance for the period between presentation of the documents and the date on which payment is due. Alternatively, your suppliers may agree to extend payment terms if you assign the proceeds of the Letter of Credit directly to them.

Knowing the payment date, amount and currency in which the payment is to be made also enables you to predict your cashflow more accurately and hedge and currency exposures in advance.

Potential insurance savings

As outlined, the risk of payment default is significantly reduced provided you meet the terms of a Letter of Credit. This means there is less need to take out separate credit insurance. Asking us to confirm your Letter of Credit can also reduce the need for ‘political risk’ insurance.

How it works

Export letters of credit cover your trade risk by giving you a guarantee that you’ll be paid once you’ve met your part of the deal and provided the required documentation.

Your buyer’s bank provides this guarantee in advance, so you can start the arrangements for dispatching the goods with confidence. What’s more, it may be possible for you to export letters of credit to manage your cashflow during the process.

We can also help you get the detailed financial information you need to reduce the risk of trading whether that’s with new buyers or current customers who want to increase their orders.

Find an International Manager

Our team of expert International Managers4 covers the UK, providing businesses with expert support and guidance on trading overseas.

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