Dear Catalyst!

Thank you very much for your answers. This is really practical and useful information.

I'd like to pose another question which is, can L/C be amended to shorten the usance period from 90 days to 30 days after the goods have been sailed and shipping documents already withdrawn by the buyer from issuing bank?

I apprecite your help. Thank you.

Regards

Javed Ali

Dear Catalyst,

If the beneficiary receive LC, is it possible that beneficiary can get money from bank against that LC for some financial help to make the production for supply. ???

I'd like to pose another question which is, can L/C be amended to shorten the usance period from 90 days to 30 days after the goods have been sailed and shipping documents already withdrawn by the buyer from issuing bank?

I apprecite your help. Thank you.

Regards

Javed Ali

 

No. Once the documents have been presented, the LC stands utilised; it is no longer available for any purpose. No amendment to its original terms is possible thereafter.

_Pervez wrote:

Dear Catalyst,


If the beneficiary receive LC, is it possible that beneficiary can get money from bank against that LC for some financial help to make the production for supply. ???

=====

 

Yes, it is possible - at he discretion of the bank concerned. But note that the LC is not exactly a security against a loan. It only assures payment against presentation of complying documents - only after shipment has been made. You would have to apply separately for pre-shipment finance from the bank. Availability of an LC makes things a bit easier for the beneficiary. 

According to my information there is a "red clause" in the L/C that gives right to supplier to get some payment before shipment and this payment can be used for manufacturing purpose. However you'll need to negotiate with the buyer before opening the L/C to add the red clause. I am not an expert  on L/C matters so would request some friend on Alibaba to confirm what I have mentioned above is correct. Thank you.

very useful information

i am going to do my import from china from the company base in hongkong, should i prefer L/C or go for TT. as you know chinese companies prefer TT more often, company is known to me. but this is first dealing with the company.. what do you suggest?

We have a customer who is from
once inquired our Coating thickness gauge. He let us send the DEMO CM8826FN to him and promised if the tester meets his requirement, he will buy 100 sets, otherwise he will return us the DEMO in 30 days after received it.

 

But once we send him the DEMO by DHL (AWB: 2722369440), he is disappeared. So far, we have not got any information from him.

 

We are very disappointed for his behavior.

 

The following are his contact information:

 

Paul Wilkins

 

Managing Director

 

Paint Supplies Ecosse

 

11 Greystone Park, Glenrothes Fife, , KY7 4UL,

 

TEL: +4401592771641

 

FAX: +4401592771641

 

Email: paulwilkins1@hotmail.co.uk

 

                       I would recommend T.T only if you have rep. office in HK. Otherwise L/C is preferable provided the L/C charges are not too high in comparison to the total order value. Even in the case of L/C supplier can compromise on quality. Since this is your first order I would strongly suggest you to get help of some local sourcing agent in HK which can help to manage the payment + quality risk through his/her services. By the way I think one's gut feelings are also very important to reach such decisions in business.

Catalyst wrote:

I'd like to pose another question which is, can L/C be amended to shorten the usance period from 90 days to 30 days after the goods have been sailed and shipping documents already withdrawn by the buyer from issuing bank?

I apprecite your help. Thank you.

Regards

Javed Ali

 

No. Once the documents have been presented, the LC stands utilised; it is no longer available for any purpose. No amendment to its original terms is possible thereafter.

Dear Catalyst!

                            Thank you for your informative reply. I have another relevant question to ask. Every one knows opening the L/C means to open an L/C. But what does it mean by saying "closing the L/C"? We have a buyer who was supposed to open the L/C this week but now they say L/C is delayed and tthey wil open the same after few weeks. When I asked the reason I was informed by the buyer that they have opened L/Cs for many suppliers and expect some "L/Cs  to be closed by this weekend" . They will be able to open new L/C only after that. Please tell us what is "closing the L/C" means and how does it take place? I mean what is the procedure for the same? Thank you in advance.

Best Regards

Javed Ali