In the trade industry, suppliers want to make sure that they are going to deal with a financially capable buyer who they can trust. So, before signing the contract, they used to demand the buyer to prove their financial ability by providing Comfort Letters. So, what is Comfort Letter, how it will help buyers to prove their financial strength? This is what we are going to explain in this blog!
What is Comfort Letter?
Bank Comfort Letters is the notification issued by a bank via an authenticated SWIFT MT799 to assure the financial capability of the person involved in the transaction. The main purpose of this MT799 is to show the buyer’s credit status; also, their ability to conclude the deal, without making any default in payment.
It is important to note that the Letter of Comfort does not give any payment assurance; rather it certifies the buyer’s financial score in conducting business.
How does BCL MT799 Works?
Once the buyer sends a BCL MT799, it creates an assurance to the seller that the buyer is financially stable; to embark on the new project. After receiving the MT799, the seller sends the proof of product (POP) to the buyer’s bank; which shows that the seller has the products available to ship. By doing this, Comfort Letter builds trust among both parties. Further, this POP helps the buyer to open a Letter of Credit and SBLC for the upcoming trade transaction.
Importance of Comfort Letters
Well, like all other Financial Instruments, Bank Comfort Letter plays an important role in the trade market. When the trade transaction is going to happen between two traders; who are unknown to each other. Comfort Letters can help them to come out of the confusion by boosting confidence & trust. By issuing MT799, the buyer proves their financial strength to their seller. Further, in return, by providing POP, the seller shows the availability of their products.
How to Get Bank Comfort Letters?
Do you require Comfort Letters to prove your fiscal standing in doing imports and export? Contact us with your MT799 request!
Since we have our own Trade Finance facilities available in European Banks; we lend our credit lines on your behalf. So that you can get Comfort Letters from our bank account which shows that you’re financially capable without blocking your own cash funds.
Submit your MT799 request to us & get the Proof to show your financial worth!
Get Comfort Letter from European Bank Accounts!