Why You Should Get SBLC From The SBLC Provider

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THE HANSON GROUP OF COMPANIES
www.thehansongroupofcompanies.com
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Why You Should Get SBLC From The SBLC Provider
Letters of credit have become one of the most
common means of payment in foreign trade. Through
them, exporters acquire payment security once the
merchandise has been transported. However, there
are many types of financial instruments and each
one has special characteristics. It guarantees
the payment at different times during the
transaction between the buyer and the seller
which can be available to you via the SBLC
provider.
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• One of the most common financial instruments is
  the standby letter of credit which, in the event
  of default by the buyer, the buyer's bank makes
  the payment to the seller on behalf of its
  client. In this post, we explain what a standby
  letter of credit is and what its main
  characteristics are.

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SBLC PROVIDER - WHAT IS A LETTER OF CREDIT?
A letter of credit is a document issued by the
importer's SBLC providers in his name and that
gives the exporter a guarantee that payment for
the merchandise will be made once it has been
transported.
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To demonstrate that the merchandise has been
transported, the exporter will have to send the
documents that ensure this operation and, when
the importer's bank receives them, they comply
with the agreed conditions, and make the payment.
Letters of credit have become one of the most
common means of payment, with irrevocable letters
of credit being the most widely used.
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On the other hand, another of the most common
letters of credit is the standby letter of credit
which, far from working as a payment method, is a
payment guarantee in the event that the buyer
faces a setback that prevents him from carrying
out payment under the agreed conditions and time.
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A standby letter of credit is a document issued
by the buyer's SBLC provider that guarantee the
payment of the operation to the seller in the
event that the buyer fails to comply with the
agreed agreement.
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In this way, unlike the other types of letters of
credit, it does not work as a payment method
since if the buyer fulfills his obligations
regarding the operation, this document will not
have to be used at any time during the process.
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TYPES OF STANDBY LETTER OF CREDIT
? Financial - It guarantees the payment of the
merchandise in accordance with the conditions
agreed between the buyer and the seller. ? Of
performance - The buyer's bank guarantees payment
to a third party when its customer fails to meet
a non-financial contractual obligation. This type
of letter of credit is less common. ? Stand-by
letter of credit Characteristics A document
that guarantees payment to the exporter in case
the buyer does not comply with any agreed
agreement. ? It also guarantees that the buyer
receives the merchandise for which he is
paying. ? Unlike other letters of credit, this
one does not work as a payment method. ? They
are issued by the buyer's SBLC provider.
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