Most of the traders are often rely on extra financial sources to conclude their trade deals. To help the traders in need, Federal and other financial sectors have created a range of Bank Instruments; to provide the trade finance support. Mostly, these trade finance tools tailored to satisfy the demands of the traders. The role of trade finance services in global trade is notably important to conclude the deals successfully.
Importance of Bank Instruments
Using a Bank Instrument for business serves as a source of working capital to conclude trade deals. So, no need for traders to utilize their cash funds for their trade deals or contracts. Also, it acts as a guarantee for each party involved in trade deals.
Bank Instruments are the major financing option available to banks to assist the needed traders with their financial tools. But to provide these instruments; banks will mostly require cash margin and some sort of security from traders. But, most of the traders won’t have enough cash funds in their hands; so, they used to lend help from other trade finance providers.
Different Types of Bank Instruments
It also called a Letter of Credit or LC MT700. Documentary LC acts as a written undertaking to assure the sellers; that they will receive the payment on time; once they ship the goods, as per the agreed contract. Further, on the other side, this assures the buyers that they will receive the goods without any default. To avail LC MT700 from rated banks, contact LC providers in Dubai. We will assist you to avail MT700 without pledging any cash margin from your end.
Standby LC or SBLC MT760 acts as a guarantee issued by a bank on behalf of its client. This assures the payment to the seller; i.e. in case of the buyer’s default. Further, this acts as a “Payment of Last Resort”. If you’re in need of MT760 to conclude your import and export, contact SBLC Providers in Dubai.
BG MT760 acts as a guarantee issued by a bank to undertake the commitment on behalf of the applicant, in case of default. BGs usually used to facilitate the purchase of bulk trade dealings, heavy equipment, and large building contracts. We, the BG Providers in Dubai help traders to conclude their bulk dealings without blocking their cash funds.
Advance Payment Guarantee or Payment Bond is mostly used by contractors to avail advance payments from their project owners; to execute the work on the project. For this, the contractor needs to provide an Advance Payment Bond on their behalf and in favor of their project owners. To avail such MT760 from rated banks, contact us today!
Performance Bond also called a Surety Bond. This is issued by a bank on behalf of contractors and in favor of project owners. This is used to assure the positive completion of the project. To avail such MT760 Guarantee on your behalf without blocking your cash funds, contact us today!
Bid Security Bond
Also called Tender Bond or Bid Bond. This is issued by a bank on behalf of their client to assure the accuracy of the bid quoted in the bidding process. Also, this bond helps contractors and sellers to win the contest and helps them to avail worthy contracts and trade deals.
The above mentioned are few of the Bank Instruments which often used by traders and contractors to run their business without facing any fiscal risks.
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