You want to import goods from China, but don’t know how to start? This is exactly why we, the LC providers in Dubai have created this article. Here you will find out more info on – Methods of Payment used by Chinese sellers & how to import goods using LC at Sight.
Usually, North China exports industrial goods such as machinery parts, equipment, etc. and East & Central China exports all kinds of commodities & South China export hi-tech products and fashion accessories. From machinery parts to fashion accessories, China stays as the top destination to import goods at the best prices. If you are the one looking to purchase goods from China, then you must aware of the methods of payment used by Chinese suppliers.
Methods of Payment Used to Import Goods from China
In China, there are many ways to finance imports and the most common is – Letter of Credit and Documentary Collection. Among these two, Letters of Credit has mostly preferred by suppliers as it gives complete payment protection.
Using Letters of Credit is not only beneficial for the suppliers; but also, for importers. Usually, in China, the seller starts shipping goods on the basis of 30% advance & 70% upon shipment. So, to purchase goods from a Chinese supplier, you need to be ready to provide 30% of the total value as advance payment. But, in case, if you don’t enough cash funds to pay as advance means; you can choose LC as your payment term. This ensures your supplier that they will receive the payment, once they submit the shipping documents to the bank as stated in the issued LC.
Since LC gives the payment assurance to the supplier before the supply of goods, suppliers are ready to supply the required goods as per the agreed contract without getting any advance.
How to Get Letter of Credit to Import Goods from Overseas
If you’re going to buy goods using an LC as a payment term; then it’s must to get help from banks to open LC on your company’s behalf. When you contact your bank to open the LC; they will demand you to provide a 100% cash margin as collateral. If you are ready to provide the cash margin, then the bank will start working on your request. Further, it would take 2-3 days to get your request approved & then the bank will issue the LC in favor of your supplier. Normally, it will take nearly 5-6 days for the LC issuance.
In case, if you don’t have enough cash funds to block in your bank account as a cash margin; then the bank will decline your request. We, the LC Providers in Dubai understand the cash flow issues faced by importers. So, to assist you with your deal, we provide a DLC at Sight from European Banks in just 48hrs. Unlike banks, we will not take days or weeks to get your LC request approved & issued. Once you submit your request, we will analyze your deal & approve your request within a day & get the LC issued within the very next day subject to the payment of LC charges.
So, what are you waiting for? Contact us now to get a Letter of Credit from European Banks to import goods from China.
Import Goods from China Using LC at Sight