As an integral part of foreign trade, international letters of credit can grow your sales by providing a secure and reliable means of payment. In simple terms, a letter of credit is a financial guarantee of payment separate from the sale. It is a way of reducing the payment risks associated with the movement of goods across international borders.
When PMF Bancorp provides trade financing, its letter of credit services come with the territory. With PMF’s letter of credit, we also make sure your clients are reliable and creditworthy. Naturally, letters of credit and credit checks go hand-in-hand. The goal is to provide the financing you need to complete the deal and help your business.
The need for a letter of credit is a consideration in the course of negotiations between the buyer and seller. When the seller has doubts about the credit-worthiness of the buyer and wishes to ensure prompt payment, a letter of credit allows the deal to happen. If the seller is shipping to a foreign country, a letter of credit issued by a financing institution can ensure the safety because payment portion of the transaction is being handled by two independent third party financial institutions.
Letters of credit open doors to international trade by providing a secure mechanism for payment. Financing opportunities, such as pre-shipment finance secured by a letter of credit and/or discounting of accepted drafts drawn under letters of credit, are often available. The expertise of a company like PMF Bancorp with extensive international expertise and experience is made available to help complete trade transactions successfully.
If you are moving forward with an international trade deal, please talk with the experts at PMF Bancorp. By obtaining international letters of credit and doing a background check on your trade partner, we help to ensure both the deal and the accounts receivables. With an international letter of credit, what appeared at first to be a risky venture can turn out to be a profitable expansion for your company.