A COMPREHENSIVE GUIDE TO LETTER OF INDEMNITY
In the world of business transactions, a letter of indemnity (LOI) plays a crucial role in ensuring that specific provisions are met between two parties, even in the event of mishaps or financial loss. It is a contractual document drafted by third-party institutions like banks or insurance companies, guaranteeing financial compensation to one party if […]
SWIFT MESSAGE TYPES FOR BANK GUARANTEES
SWIFT commonly known as the Society for Worldwide Interbank Financial Telecommunication, is a global messaging network used by banks and financial institutions to securely exchange information and instructions for financial transactions. One of the most common uses of the SWIFT network is for the issuance and transmission of bank guarantees, such as Documentary Letters of […]
WHAT IS A DOCUMENTARY LETTER OF CREDIT?
A Documentary Letter of Credit (DLC) is an essential financial instrument in international trade that provides a guarantee of payment between buyers and sellers. This article will explore the intricacies of a DLC, its various uses and benefits, and the process involved in obtaining one. Introduction to Documentary Letters of Credit A Documentary Letter of […]
WHAT IS A DOCUMENTARY LETTER OF CREDIT ? (Part 2)
FOR THE BENEFICIARY (THE SELLER/EXPORTER)Payment is guaranteed as long as you comply with the terms and conditions of the documentary letter of credit.You are protected against the inability to pay or bankruptcy of the buyer. The issuing bank assumes credit risk when issuing the DLC.Reduce the collection time of accounts receivable as the DLC speeds […]
WHAT IS A STANDBY LETTER OF CREDIT (SBLC)?
A Standby Letter of Credit (SBLC) is a financial instrument that serves as a secondary payment method, issued by a bank on behalf of a buyer, to guarantee that the seller will receive payment in the event that the buyer is unable to make payment. SBLCs are primarily used in international trade transactions but can […]