Vegatech wrote:

I Thanks in advcnce to All the Experts there,

I work on 100% Advance payment, I am dealing in very small orders like USD 200.00 ~ USD 600.00.

I have customer in USA, He offered me the Payment terms:

20% Advance Payment,  Balance 80% Payment by Irrevocable At Sight from ******* BANK,

Allowing T/T  Reimbursement, Freely Available and Negotiable in any Bank.

I did not understand these payment terms, Kindly let me know, are these payment terms good and valid.

It is almost USD 5000.00 orders, He is only paying 20% Advance,

Is my rest of 80% Payment safe?  will I get it any cost?  Can my customer refuse to pay rest of 80%? Do I have to first give goods of 20% than I will receive 80% payment to send rest of the goods ?

I just understand till 20%, that I will get in advance, how will I get 80%, from where, whcih documents I have to submit, what time will it take. Any kind of further and important information will be highly appreciated.

I thank to all my Brothers and Sisters there for there Kind Support.  and Hope for the best suggestions.

Best Regards.

Umar Farooq.

www.vegatechinstruments.com

============== 

Hi,

The terms are Ok, perfectly safe - "ggod and valid" as you said.

Is my rest of 80% Payment safe?  - Yes

Will I get it any cost?  - No, just the amount of invoice, which should not exceed the face value of the LC.

Can my customer refuse to pay rest of 80%? - Actually, yourt customer is no longer involved in making payment, the LC issuing bank takes over that responsibility. Hence, you have a greater degree of safety and certainty.

Do I have to first give goods of 20% than I will receive 80% payment to send rest of the goods ? - I do not think so. LCs do not usually ask for it. You would have to ship the entire lot and submit documents EXACTLY as stated in the LC, to a bank BEFORE the LC expires. That bank will negotiate your documents and pay you the invoice amount (less its charges).

How will I get 80%, from where? - You will get 100%, not 80% - depending on the amount you invoice. The negotiating bank (most likely, your own bank itself) will pay you against your documents.

Whcih documents I have to submit? - Exactly as the LC states. You can, of course, ask for changes (amendments) if you  are not in a poisition to produce certain documents. 

What time will it take? -  depends on the LC terms. In this case, it is a sight LC, hence immediately on presentation of complying documents to the nominated bank concerned.

Suggest that you initially take the help from an experienced exporter. LC is the best route for you, any way.

 

Catalyst wrote:

 

 

 

 

 

Hi Catalyst

 

Why do some supports only offer 20% advance/80% balance on large orders over US$5000?  I want to place an order with a company for US$1000 but payment needs to be up front but I'm not comfortable with that.  What advise can you give me? 

 

Thanks