Letter of credit is an irrevocable act by the issuing bank to make the payment to the client in the favour of the supplier upon presentation of documents provided for in the letter of credit within the set deadline.
Letters of credit are mainly used in international trade transactions.
Such a payment instrument provides security to the supplier that he/she will receive the payment for goods, upon submission of documents in accordance with the terms specified in the letter of credit. This product is intended mainly for purchase of goods or fixed assets.
Maturity:
- Up to 24 months
Guarantor:
- For amounts up to €20,000 no guarantors required
Collateral:
- Only 50% of the letter of credit amount for amounts up to €10,000
- For letter of credit amounts > €50,000 no collateral required