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Payment term: L/C at sight 24 replies,117068 views

#1
I understand the concept of L/C, but what does the 'at sight' bit mean? I was also given the option of "30% as deposit, 70% against B/L." Once again, I'm having trouble with just the second part, "B/L."

Thanks, I'm still just getting my feet wet with payments terms and abbreviation, and I appreciate the more experienced traders sharing their information.
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#2
Re: Payment term: L/C at sight
Replying to selitzer:

AT SIGHT means when the Seller sends all the shipping documents to his bank, they in turn, send them to YOUR bank, at this point in time, YOUR bank will pay the Sellers Bank. It is when your bank sees the original documents, AT SIGHT.

B/L is BILL OF LADING. This document is issued by the shipping company when they receive the goods from the Seller. It shows what teh goods are, number of cartons, weight, which ship the goods are on etc.
#3
Re: Payment term: L/C at sight
Replying to grigo:

Not exactly like that.At sight does not always mean " buyer's bank pay when they have all the document AT (their) SIGHT"
under UCP 500; Buyer's bank formally has 7 working days to scrutinize and review the document.If there is no discrepancy found within 7 working days, then Buyer's bank has to pay.I think this is the meaning of AT SIGHT
#4
Re: Payment term: L/C at sight
it sounds to me like they are only scamming for the 30%
#5
Re: Payment term: L/C at sight
Replying to trado:

You are absolutely right trado. These are the intricate little details that banks need to go through. I was just telling selitzer the basic details of what "At Sight" means. Another point is that if either of the two Banks find ONE little discrepency in the documents (an i is not dotted or a t is not crossed), they can also reject the documents and ask for a new one to be issued. Banks are extremely careful when checking documents, to make sure they are 100% correctly issued according to the conditions of the L/C.

To answer PlaynTrade, it is sometimes very common for Sellers in China to ask for a 30% deposit, balance of 70% payable when goods are ready to be shipped. I have done this many many times. This allows the Seller to buy raw materials, and he also knows that the Buyer is genuine, and won't cancel the order once production has started, otherwise, if Buyer cancels order, Seller at least has 30% compensation.HOWEVER, one should ONLY trade this way, once a good relationship is in place between Buyer and Seller. At first, I would suggest a LC at sight. LCs are a bit costly, but faily safe. After the relationship has been secured, then Buyer could offer to send 30% by TT to Seller, and when goods are shipped, Seller faxes copy of Bill of Lading to Buyer, Buyer then TTs the balance 70% to Seller, and when Seller receives copy of TT, he can then send the Original documents to buyer. I do this all the time.TTs are far cheaper than LCs.
#6
Re: Payment term: L/C at sight
Replying to selitzer:

Agree with Grigo,
#7
Re: Payment term: L/C at sight
Replying to grigo:

Replying to grigo:

Indeed they are.
Our mnfctrng. co. only does an L/C on large orders, as you stated, they are bit pricey.
Some companies also may ask for a larger deposit. But each individual order is different.

And yes, we fax a copy of the B/L, and receive payment.
This is normally with an existing client.
#8
Re: Payment term: L/C at sight
Replying to [selitzer]:The payment term that you are dealing is 100% T/T business. Usually in this type of business buyer has to pay 20% or 30% advance payment for the mill to start production.

When the mill ships your cargo and presents you copy of B/L (Bill of Lading issue dby the shipping company)as a proof that yuour cargo has been shipped, the balance money has to be paid. After the mill receives the money in there account, they handover the original documents to the buyer.
#9
: L/C at sight
Replying to [grigo]:

Hello, how much is it for L/C at sight in average?

#10
Re: Re: Payment term: L/C at sight
Hallo!
I have a question about L/C . This is my first business with a chinease company. They offered TT 30% and 70% (B/L) or irrevocable L/C az sight.
My problem is that i would like to see the good before i pay. It will be shipped from China to Hungary. Do you know any options?
#11
Re: Re: Re: Payment term: L/C at sight
Quoting from [Kistiti]:


Hallo!

I have a question about L/C . This is my first business with a chinease company. They offered TT 30% and 70% (B/L) or irrevocable L/C az sight.

My problem is that i would like to see the good before i pay. It will be shipped from China to Hungary. Do you know any options?

Use L/C at sight and go there to inspect the goods in loading port.

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