Difference between LC and BG
Post 1 of 3
Difference between LC and BG![[em1]](http://img.alibaba.com/images/eng/style/icon/emoticons_smile.gif)
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02 Aug 2009 05:37
Post 2 of 3
LC means letter of credit in this u have to provide all the documents stated in lc terms
then only u will get the payment
BG Bank Gurantee in this the bank gives you the gurantee on the side of the buyer
the bank will issue a letter to supply the goods to the buyer and present the document to the bank
then only u will get the payment
BG Bank Gurantee in this the bank gives you the gurantee on the side of the buyer
the bank will issue a letter to supply the goods to the buyer and present the document to the bank
03 Aug 2009 10:52
Post 3 of 3
Quoting from [RAM]:
Difference between LC and BGHi
LC: The issuing bank is the first and the only line of defence. The commitment to pay is from the issuing bank, to whom the demand for payment must be made under an LC (after complying with the terms of the LC).
BG: The issuing bank is the SECOND line of defence. Only if the buyer/payer fails, demand can be made on the issuing bank to pay (in terms of the BG).
Bottom line: Either way, the issuing bank stands committed to pay.
06 Aug 2009 19:42
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