Letter of credit
SBFP BANK OFFERS RELIABLE OPTION OF PAYMENT FOR IMPORTED GOODS AND SERVICES - LETTER OF CREDIT
Letter of Credit is an internationally recognized form of international settlements, which fully meets the requirements of the International legislation and the legislation of your counterparty.
Letter of Credit is an independent form of payment and it has a number of advantages for importers and exporters, setting Letter of Credit apart from other forms of non-cash payments.
Advantages for an exporter (supplier of goods, service provider):
- Before the shipment date the exporter receives the obligation of the bank (in case the letter of credit is confirmed - a number of banks) to pay under the Letter of Credit.
- The risk of non-payment decreases providing that the exporter observes the conditions of the Letter of Credit.
- The buyer cannot unilaterally refuse to pay after the Letter of Credit issuance.
- If the supplier duly performs all the shipment obligations, there is an opportunity to receive the payment immediately.
- The Letter of Credit can be confirmed by a first-class International bank (in case the letter of credit is confirmed.
Advantages for the importer (buyer of the goods):
- The importer defines the documents set to be presented according to the Letter of Credit terms (the documents can include the third party audit certificate, goods quality or state certificates, etc.)
- The exporter receives the payment only after the documents, corresponding to the terms of the contract have been submitted.
- The importer can insist on the shipment within the reasonable time period and set the shipment time limits in the Letter of Credit.