How does an L/C work?
Post 1 of 12
I am very new to this industry. Can someone please explain to me in layman terms what exactly is the process for an L/C. Some of my buyers are expressing that they will pay an L/C at sight. What does this mean? Help!!!![[em9]](http://img.alibaba.com/images/eng/style/icon/emoticons_dizzy.gif)
04 Mar 2006 19:04
Post 2 of 12
Replying to [ValD]:LC (Letter of Credit) at sight is when your bank holds the funds in the bank, issues the LC to the Supplier (to his bank), and when the Supplier ships the goods, they submit all their documentation to their own bank, from there they are sent to your bank, and if the docs are all in order, your bank then transmits the funds to the Supplier's bank, meanwhile, your goods are on their way.
08 Mar 2006 20:56
Post 3 of 12
Replying to [ValD]:Just knowing the meaning of L/C wouldnt be enough for you. Because every statement on Letter of Credit should be understood very well. I think you should ask your bank to check the L/C and explain the statements very clearly so you can decide what are you going to ask from your client.
25 Aug 2006 02:56
Post 4 of 12
Replying to [ValD]:check this out:
http://resources.alibaba.com/article/60/Letter_of_Credit_L_C_transactional_flow_diagram.htm
http://resources.alibaba.com/article/60/Letter_of_Credit_L_C_transactional_flow_diagram.htm
25 Aug 2006 09:02
Post 5 of 12
Replying to [ValD]:check www.export911.com and you will find all informations you need,also L/C samples
30 Aug 2006 13:09
Post 6 of 12
Replying to [ValD]: http://www.export911.com/e911/gateway/summary.htm
30 Aug 2006 23:13
Post 7 of 12
Replying to [ValD]:You may already be reading all those lenghty, but necessary explanition shown on the links other fellow members have posted.
Since you are new to this term or business, I strongly recemmend you to conduct your business on T/T basis (if you can get your customer to agree with) The L/C can be complicated and 'manupilated'. If you are not careful to read and understand the terms, you may end up a big time loser.
That's only my advise. Take it or not, up to you.
Since you are new to this term or business, I strongly recemmend you to conduct your business on T/T basis (if you can get your customer to agree with) The L/C can be complicated and 'manupilated'. If you are not careful to read and understand the terms, you may end up a big time loser.
That's only my advise. Take it or not, up to you.
03 Sep 2006 23:53
Post 8 of 12
Replying to [ValD]:Replying to [ValD]: The LC is the secure way to garantee the payment against goods . You can trust to the payment in this way and you will not lose the money . if you can get all the charge in one step so TT is great but if you want to get the money after merchandises , LC insure you about your money against the buyer . The procedure is concerend to the banks and the fund is saved in the bank , actually buyer's bank insure paying despite buyer are not able to pay the money . the bank will pay the money against the goods and you are not involved in problems of the buyer .
A kind of credit which is acceptable for both , but it costs for the buyer(who pay) and for high amount of money is suitable . a little time taking but secure .
A kind of credit which is acceptable for both , but it costs for the buyer(who pay) and for high amount of money is suitable . a little time taking but secure .
08 Sep 2006 12:16
Post 9 of 12
Alipw, please be very careful about what you say.
Under an L/C, the bank does not pay money against the goods.
The bank pays against DOCUMENTS.
The bank does not not get involved with the goods at all.
![[em1]](http://img.alibaba.com/images/eng/style/icon/emoticons_smile.gif){kind=icon}
08 Sep 2006 17:11
Post 11 of 12
Replying to [Aussie]: That what I was confusing about. This means even an L/C cannot guarantee to get the right and authentic goods from China. What is the method then? May be the Escrow Service? We were cheated two time just by believing them. One is even a Chinese gold member on Alibaba.
19 Sep 2007 16:46