Back to home Help Contact Us Register with us Login Home

 

Credit Finance
Trade Finance

Letters of Credit

Benefits
Key Stages

Glossary

Incoterms 2000

Documents
Credit Insurance
Export Finance
Factoring
Forfaiting
Import Finance
Invoice Discounting
Merchant Finance
Open Account Funding
Post-Shipment Finance
Pre-Shipment Finance
Purchase Order Finance
Stock Finance
Supplier Finance
wwcb2b.com
Letters Of Credit Funding
Key Stages

Image : Diagram of the Documentary Letters of Credit Trade Process

The Documentary Letters of Credit (LC) Process

1. Importer & Exporter negotiate terms of the contract
2. Importer instructs their bank, the Issuing Bank, to open a LC in favour of the Exporter
3. Importer's Bank, the Issuing Bank, issue the LC to the Exporter's Bank, the Advising Bank
4. LC is received by Advising Bank which checks the LC, then passes it on to the Exporter
5. Goods are shipped
6. Shipping documents are prepared and submitted to the Advising Bank by the Exporter
7. Advising Bank checks the documents. If they comply with LC they send the documents to Issuing Bank and may pay the Beneficiary/ Exporter in advance of being reimbursed by the Issuing Bank
8. Issuing Bank checks documents again, if correct they are released to Importer and the Importer's account is debited
9. Issuing Bank reimburses Advising Bank
10. Payment sent to Beneficiary/Exporter if this didn't occur in stage seven

 
 
 
top
   

Copyright 2001 -  2016
 Worldwide Company Corporate Finance Brokers All Rights Reserved, 
Privacy Policy