In an effort to help members from varrying nations I'd like to open this topic up to other members who would be willing to tell us what the costs of opening these documentary credits are in their own countries and with what banks.   In this way you could be helping yourself shop rates from other banks and also help the newer members of the forum. 

Best regards,

Ranger

Replying to [Ranger]:

I would also like to know what the rates are in the UK. I would be planning to usa L/C once i get to know the intercoms and further business. Any insight would be helpful.

Replying to [Ranger]:

An excellent idea.

Replying to [Ranger]:
Dear Ranger, It seems you know much about L/C. Can you give me some advice?
One American customer require to use L/C90days.
We haven't done business together before.
I am a green hand and haven't dealed with this before.
I don't know what I should take care.
We maybe accept irrevocable L/C60days because if we can't get the payment in three months, we can't get the export tax refund.
What do you think?
What should we take care about this?
Thanks!

Fei Wong

Quoting from [Fei Wong]:


Replying to [Ranger]:

Dear Ranger, It seems you know much about L/C. Can you give me some advice?

One American customer require to use L/C90days.

We haven't done business together before.

I am a green hand and haven't dealed with this before.

I don't know what I should take care.

We maybe accept irrevocable L/C60days because if we can't get the payment in three months, we can't get the export tax refund.

What do you think?

What should we take care about this?

Thanks!


Fei Wong

Fei Wong,  You might try this.  Ask that they open an L/C with red clause.  Based on what you are saying about your taxes.  In the clause you can ask for installment payments at specific intervals.  I would suggest and Catalyst can jump in here too, is that the first payment due be a sight draft on presentation of shipping documents, 2nd installment of payment at 30 days and then final payment at 60days.  In reality I can see no reason why buyer would need to extend to 90 days unless this is a multi-shipment agreement.

Now then you can set it up in many ways so that your customer does not suffer a cash flow problem with out goods it could also be 25% at sight 25% at 30 days and 50% at 60 days.  There are many ways to do it but make sure that both you and your customer undertsand what each needs so that there is no reason to ammend the credit.  When you have had sufficient dialogue issue the proforma invoice with the agreed upon terms.

Best regards,

Ranger 

Replying to [Ranger]:
Dear Ranger, thanks a million for your help!
I know what to do now.

Best regards
Fei Wong

Replying to [Fei Wong]:

If your prospective customer is a legitimate buyer, they will understand your situation and try to work with you. The key here is communication and mutual cooperation. You should express to them your dilemma about the export tax refund and if they are serious, they will try and work out a reasonable solution.

Replying to [Ranger]:
I work as an agent for a foreign supplier and I work on tenders.I would like to know what kind of LC is best for me wherein I can satisfy both the buyer and the seller. In this case the buyer opens an LC and what is your suggestions? Also please tell me what are the best terms & conditions to be mentioned in the LC for smoother transactions. This is the first time that I am doing this kind of transaction.

regards

Replying to [Ranger]: Hi I am from Singapore

It cost 0.125% of L/C amount as L/C commission & swift Telex USD 50 for L/C opening charges. Interest vary from 7% to 8%. Kindly advice same at your side.

Thnks

Could someone help with getting intorudced to the mechanisms of LOC etc ?

I'm trying to find the best way for me to accept payment by the customer and then pay the supplier. Obviously I don't want the 2 to met :-)

Any help would be great.

Thanks

Replying to [Ranger]:

can you tech me how to make L/C
it because this is very first time im do business out of my countries