Letter of Credit
Letter of Credit means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honor a complying presentation. It guarantees product protection and ensures flexible payment terms. Letters of Credit are also known as Banker’s Commercial Credit, Documentary Credit, and Letter of Undertaking.
There are several types of letters of credit, namely export or import letter of credit which are important for international trade. Importers and exporters generally need intermediaries, like banks or non-banking financial companies to ensure payment and timely delivery. Both the export and import letter of credit is substantially similar, only the perspective is different. An import letter of credit increases the trustworthiness of the importer while an export letter of credit eases the credit risk for the exporter and helps recover cash flow.
In light of your necessities, you have to pick the correct one. With the help of letters of credit, you can securely grow your business globally. On the off chance that you are getting confounded while choosing the ideal one for you, you have to connect with a well-proficient consultancy which can direct you appropriately. Contingent upon your prerequisite, you can settle on the letter of credit of your choice.