Role Of SBLC Provider
In today’s world, with the rapid development of the economy, many countries have kept pace with economic globalization for which overseas trade is increasingly important. In conditions of global instability, mitigating risks and ensuring the security of international shipments becomes a prerequisite for the successful closing of any foreign trade transaction. To achieve this success, the existence of financial instruments by the SBLC provider is necessary that allow companies to operate with the confidence that they will receive timely payment for the goods and/or services provided, and that, where appropriate, they will have flexible and flexible guarantee instruments. efficient in their execution in the event of a breach.
Contingent letters of credit, also known as standby letters of credit, are among the commercial financing instruments to boost business commerce. These have been effective thanks to the intervention of financial institutions such as the Hanson group of companies, which has the advantage of being present in many countries around the world. Letter Of Credit Both the regular letter of credit and bank guarantee lease are payment instruments used in overseas trade. However, there are some basic differences in the product. The letter of credit is a promise from the SBLC provider that the buyer, that is, the importer, will fulfill his obligation and pay the full amount of the invoice on time. The role of the SBLC provider is to make sure the buyer pays. In case the buyer cannot fulfill his obligation, the bank will pay the seller, that is, the
Characteristics A bank guarantee lease does not have any specific characteristics that the buyer must meet to complete a transaction. It has basic requirements such as documentation, packaging, etc. But overall, it is a simple and straightforward payment instrument. The bank guarantee lease may have specific clauses that the buyer must comply with in order to use this instrument. For example, a company that resides in Brazil agrees to buy 10,000 bottles of wine from a winery in Argentina. The Argentine winemaker does not want to take the risk, so it asks the Brazilian company to obtain a contingent letter of credit. The Brazilian company obtains a standby letter of credit from the bank and adds the following clauses:
• 80% must be red wine and 20% sparkling white wine. • Each bottle must be inside a wooden box with a label and logo • There can only be a 2% margin of defect, that is, only two defective or broken bottles out of a hundred are accepted. • The winery must meet all criteria for the sale to be eligible for payment by a standby letter of credit. A regular letter of credit cannot meet such criteria. With the Hanson group of companies choose which one do you need Whether you need a regular or contingent letter of credit, the Hanson group of company’s financial backing will help you boost your business commerce.
At the Hanson group of companies we receive and process Letters of Credit issued and if required we can add our confirmation in those cases in which the risk of the issuing bank is satisfactory according to our credit and risk parameters. Our services include: • Notice of receipt via e-mail on the day of receipt. • Review of shipping documents within 48 hours of receipt. • Notice of receipt of funds via e-mail. Avoid risks with reliable advice from a connoisseur of international trade, SBLC provider have solutions tailored to your company and business.