Letters of credit are a way British exporters can de-risk sales to customers in parts of the world where it is harder to gauge the credit worthiness of a buyer. They are commonly used for international sales to Africa, South America and the Middle East amongst other places.
A letter of credit is issued by your customer’s bank and is a promise to pay as long as pre-agreed terms and conditions are met.
However 68% of letters of credit are rejected on first presentation - this doesn’t necessarily mean you won’t get paid but it does mean you’ve got more ts to cross and i’s to dot.
My name is David James and in this episode of UK Export Advice I’m talking to Mark Runiewicz of SC Advisors about the all important details on a letter of credit and how to make sure you get paid every time you sell overseas.
You can find out more about the services provided by SC Advisors at http://scadvisors.co.uk/
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