What are letters of credit?
A letter of credit outlines the specific terms to be fulfilled before payment will be made in a trading relationship. The letter provides a guarantee from a financial provider that, once the stipulated terms are met, payment will be made. This guarantee keeps the wheels of international trade moving by reassuring a supplier that they will receive payment for their goods, with the reliance on the trustworthiness of the financial provider rather than a potentially fledgeling company.
When trading internationally, minimising risk and building strong relationships with suppliers is vital. Letters of credit provide this bedrock of security on top of which a strong and trusting relationship can be built.
Who are letters of credit suitable for?
Thanks to the reliance on the trustworthiness of the lender, this type of finance is suitable for younger companies establishing themselves in the world of international trading. Businesses trading internationally or in the UK are eligible to benefit from this type of finance, although more traditionally we see it used in cross-border import/export situations.
Enjoy the layer of security for import and export transactions with a letter of credit. Speak to us about whether this finance product is suitable for your business and, if so, how to get it up and running. As a customer of Access Commercial Finance you will also enjoy:
No hidden fees or early repayment fees
Fixed interest rates
Applications considered from any industry
Money for any purpose
A slick application process