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Import Letter of Credit

A secure way to pay your suppliers

With a Letter of Credit, you can pay for the goods you import while covering your trading risks.

Key features

  • Payment to your supplier is secured, provided they conform to the terms you’ve specified in the Letter of Credit
  • Gives you the opportunity to negotiate the terms of trade, especially valuable with new suppliers
  • May enable you to negotiate longer credit periods and attribute costs to your supplier
  • Payment can be made for any amount and in any freely trade currency on delivery of the documents or on a fixed or determinable future date
  • Can enhance your trading status and competitive position
  • Can be applied electronically using Global Trade Portal (GTP)

How it can help your business

Import letters of credit give you an extra cover and control so you get exactly what you need, when you need it. You’ll know that your seller can claim payment only if they comply with all the terms in the letter of credit.

Gives you more control

Payment is only made against the documents you specific, which can be an important advantage when you’re buying from new suppliers. We have the experience to offer guidance on which documents you can ask for, and on how to word the terms.

Enhances your bargaining position

You may be able to negotiate longer periods and reduce costs with your suppliers by agreeing to pay via Letter of Credit, using the significant benefits that your supplier gains as the basis of your negotiations.

Improves your competitive status

Agreeing to make payment via Letter of Credit can raise your status in the eyes of your suppliers since banks will only issue Letters of Credit on behalf of customers they consider to be creditworthy. This could enhance your competitive position, particularly with suppliers who insist on payment by Letter of Credit.

How it works

We can issue a Letter of Credit on your behalf to provide a secure means of payment to your overseas suppliers. The beneficiary of the Letter of Credit, your supplier, will only receive payment if they present documents that comply exactly with the terms and conditions of the Letter of Credit.

Depending on the agreed terms, these documents might include a bill of exchange, bill of lading or air waybill, invoice, insurance policy and certificate of origin.

Find an International Manager

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

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