Import Finance Facility refers to different types of financing options available for traders to solve their cash flow issues. Also, it helps to reduce the risks involved with global trade. It covers a range of financial tools including – Letters of Credit, and Bank Guarantees.
Trade Finance offers many benefits, as it helps to bridge the trust issues between buyers and sellers. Also, as it improves cash flow; businesses can conclude multiple deals at a time, without the need of tying up capital in a single deal.
For example: If you’re having millions of dollars worth of trade deal in hand; and it is not possible at that time to raise capital, Import Finances can help you to conclude your deal. With this option, you can grow your business without blocking your cash funds; or dealing with the equity, or losing any valuable assets.
What is Import Finance Facility?
Like Trade Finance, Import Finances also covers a range of financial instruments that helps traders to do trade globally. Further, it also provides protection to both buyers and sellers in cross border trade deals. Import Letters of Credit and Bank Guarantees are the most popular import finances used by traders for their deals.
Import Letter of Credit
An Import Letter of Credit – DLC MT700 is a type of import finance option. This written undertaking issued by a bank assures the payment to the sellers. This type of LCs issued on behalf of buyers and in favor of sellers; ensures the payment will be made for the shipped goods; once the certain terms are met by the seller.
To receive the payment, usually, the seller needs to provide certain documents as proof to the bank. And this shows that the goods shipped to the buyer; as agreed in the contract. Further, the bank issuing Letters of Credit on behalf of the buyer also undertakes to make the full payment; once the seller complies with all the terms stated in the MT700.
Bank Guarantee for Imports
Even though Bank Guarantee and Letters of Credit used for a similar purpose, there are some major differences between the DLC MT700 vs BG MT760. DLC MT700 used to ensure that the transaction will be done, as planned. Whereas, BG MT760 used to handle the losses; if any unforeseen happens.
Bank Guarantee is a financial instrument issued by a bank that guarantees that the specified amount paid to the seller; in case of any buyer’s default. This BG MT760 used when importers and exporters dealing with overseas clients; with whom they have no relationship before. In this case, a BG MT760 acts as a guarantee to reduce the risk; which is borne by each party in the transaction.
How to Avail Import Finance Facilities?
If you’re planning to import goods from overseas – whether it can be from Europe, China, or USA; we can help you by providing the required Import Finance on your behalf.
We, Letter of Credit Providers provide LC MT700, SBLC MT760, Bank Guarantees, and Performance Bond on behalf of importers and exporters for their global trade needs.
Start the process now to avail Import Finance Facility!
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