What is a Documentary Letter of Credit (DLC)?
The technical term for Letter of credit is ‘Documentary Credit’. At the very outset one must understand is that Letters of credit deal in documents, not goods. The idea in an international trade transaction is to shift the risk from the actual buyer to a bank. Thus a LC (as it is commonly referred to) is a payment undertaking given by a bank to the seller and is issued on behalf of the applicant i.e. the buyer. The Buyer is the Applicant and the Seller is the Beneficiary. The Bank that issues the LC is referred to as the Issuing Bank which is generally in the country of the Buyer. The Bank that Advises the LC to the Seller is called the Advising Bank which is generally in the country of the Seller.
How can a Letter of Credit help you?
For agents, brokers, corporations, government linked companies, small-medium sized enterprises, and traders; Documentary Letters of Credit (Financial Instrument) improves credit worthiness and reduces risk of default, you can gain access to financing options not previously available.
TFC can arrange and help you obtain this important financial instrument within a 48 -144 hour turnaround time upon full submission of documents required.