To meet the emerging demands of PPE in the local market, the Nigerian trader decided to purchase medical gloves and masks from reliable suppliers. To make this deal conclude successfully, Bronze Wing Trading, the trade finance providers in Dubai issued Confirmed LC on behalf of the buyer and in favor of the seller without availing cash margin.
The Trader Required Confirmed LC
Since the start of the COVID-19 outbreak, the demands and needs of PPE supplies like gloves and masks have been increased. Also, countries are facing a spike in demand for PPE due to the Covid-19 pandemic. So, to meet the market demands, the trader decided to purchase gloves and masks from a reliable supplier. While searching for the one, the trader found a seller from China; who is ready to supply the required items at the best price. So, they contacted them and signed the Letter of Purchase.
The Chinese seller had the required PPE items ready for shipment. But, on the other hand, the trader didn’t have enough cash funds in their account; due to the COVID-19 recession. So, they thought of making use of MT700 to conclude the deal. Since the seller was also already aware of the pandemic situation, they agreed to the buyer’s request on using a Letter of Credit or LC MT700 as payment terms.
The Bank Declined the Trader’s LC Request
As we all know that the economy has been very badly hit due to COVID-19. And, almost all banks have restricted access of their trade finance facilities. So, it seems to be very hard to avail trade finance support from the banks. Even being aware of this, with a little hope, the buyer contacted their bank with the LC request. The bank was ready to help the trader but on demand of a 100% cash margin.
The trader didn’t have enough cash margin in their bank account. So they decided to get help from trade finance providers and started searching for a Letter of Credit Providers. While searching on Google, they come across with our LinkedIn Profile and contacted us.
BWT Helped the Trader with Their Confirmed LC Request
The trader sent us an email stating their requirements and their demand. We carefully studied their trade deal. Despite lockdown and curfews, we understand the urgent need for PPE supplies and decided to help the trader by issuing the MT700. We approved their request and asked them to sign the service agreement. They sign the agreement and paid the admin charges. Further, we started work on their deal and issued the LC draft for their approval.
The trader approved the LC draft and paid the issuance fee and provided the related documents of their trade deal to us. After that, we worked with our bank and instructed them to issue the Letter of Credit on behalf of the buyer. Upon our request, the bank issued the required LC to the seller’s bank via Swift MT700.
The Chinese Seller Shipped the Goods to Nigeria
After receiving the LC in their favor, the Chinese seller shipped the required PPE supplies, as per the agreed contract. The buyer from Nigeria felt satisfied and happy with the service provided by us. Also, he stated that BWT has offered timely support by issuing the LC MT700 within 2 days without cash margin. This is how we helped the buyer from Nigeria to conclude the PPE supplies deal; by providing the Letter of Credit on their behalf and in favor of the seller.
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