Product Description

Importers that have regular supply contracts with Exporters may have to support such contracts by providing a payment Guarantee or Standby Letter of Credit.

The Importer arranges for his bank to provide the Exporter with a Guarantee that, in the event that goods have been shipped to the Importer and the Importer has not paid the Exporter, the Importer's bank will guarantee payment for a pre-determined amount.

Product Benefits

Importer can secure a regular supply of goods.

Enables the Importer to establish a pre-determined credit line with the Exporter.

Utilisation of the Importer's credit facility with their bank is limited to the maximum amount due to the Exporter.

Enables the Importer to negotiate better price or credit terms with the Exporter.

May provide access to cheaper trade credit when compared to overdrafts.

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