Letter of credit is customisable and a very effective form which has the capability of enabling new trade relationships by reducing credit risk. But, it has the capability of adding on to the cost of doing some uncertain business in the form of formalities or bank fees. It is essentially a letter issued by one Bank to another concern as a guarantee of payment for a specific person on particular terms and conditions.
People often say Letter Of Credit works very well when other options don’t. Importers and exporters can reach reasonable payment terms via a letter of credit. There are several other benefits involved with having a letter of credit. The most important ones are written in the passages below.
Here’s why having a letter of credit is considered important
These benefits written below are common to get when attaining a letter of credit.
Helps you in reaching new customers
These days, setting up new business connections is not easy. It is very difficult to find a new buyer who will be ready to make an advance payment to an inexpert professional. By offering a letter of credit, you will get a chance of securing the order.
You can enhance Export coverage with its help
Exporters can effectively use letters of credit. For example, the Letter Of Credit is the main payment option for the majority of people in the business. That’s why getting it can advantage you.
Give proof of creditworthiness to all
By issuing a letter of credit by a well-reputed non-bank financial company, the importer can prove that they are a financially reputable company.
Letter of credit is said to be the most preferable payment terms
The importer may convince the exporter to work with deferred payment terms in place of an at sight payment by means of a letter of credit. As the exporter can discount the credit any time, deferred payment should not at least be a big problem for them.
Willing enough to know about a well-reputed non-bank financial company that can provide you with a letter of credit? Then read the last passage of this article.
Choose this non-bank financial company
“Merchant Credit and Guarantee Corporation Limited (MCGCL)” is a well-reputed non-bank financial company that can offer you Letter Of Credit. This is a renowned company offering services in Thailand. Get to know about this company more by visiting their website- merchantcreditcorp.co.
