90 days off usance letter of credit problem, ask for help!

Addendum: Yes, there is only good and no harm to you, is there any problem?

You are the payer, the usance letter of credit will only be beneficial to you, and you will not be asked to bear the discount interest, and it is also the business of the other party's ** business; The meaning of 90-day forward means that after the customer submits the document, the issuing bank will pay the money to the ** merchant after 90 days, which is equivalent to an additional 90 days for you to use the funds.

So if you can really pay the money to the issuing bank in advance, why don't you do it at sight... If the usance letter is fake, the applicant must bear the discount fee, interest and other costs.

Then you just do the long-term ... It doesn't matter to you whether he discounts it or not. Besides, making a usance letter of credit is beneficial to your capital turnover.

This is not a false forward certificate, the false forward is that the payment time on the certificate is 90 days, but the additional clause behind is to require immediate payment It should be that they use your certificate to make some collateral or bank financing It is still suitable for you to pay late The funds have more turnover period

The upstairs analysis is correct, but it is also necessary to consider why the owner of the goods should choose a payment method that is beneficial to the payer? If I am a seller, 100% L/C at sight is not good for me?? Indonesia wants you to open a forward 90-day letter of credit, I don't know if you want to use your letter of credit to do any guarantee or other business...

Don't follow their ideas, if we want to open a letter of credit, we will follow our bank guarantee.

Summary. Hello! To discount is also the other party's business, the usance letter of credit will only be beneficial to you, is there any problem: yes, the issuing bank will pay the money to the merchant after 90 days?

You are the payer, that is, after the customer submits the document, you will not be asked to bear the discount interest; The meaning of 90 days forward means that you have 90 more days of use of the funds, which is only good for you.

If it helps you, hope.

90 days off usance letter of credit problem, ask for help!

Hello! It is also a matter for the other party to discount, and the usance letter of credit will only be beneficial to you, is there any problem: yes, if the issuing bank stops the old stop 90 days before paying the money to the ** businessman?

You are the payer, that is, after the customer submits the document, you will not be asked to bear the discount interest; The meaning of 90 days forward is that you have 90 more days of the use of the funds, which is only good for you, and there is no harm if it is helpful to you, hopefully.

These descriptions of usance letters of credit are not standardized, and the meanings are similar. The key point is to pay after 90 days, for the seller, this form of usance letter of credit is disadvantageous, because 90 days after seeing the bill of exchange, this time point of seeing the bill of exchange is an uncertain point in time, which may lead to a delay in payment, that is, the delay will be more than 90 days. Even if it is more than 90 days, you have no way to verify it because the starting point is not clear.

Therefore, most usance letters of credit stipulate that 90 days after the B l date, because the B l date is a definite date, that is, the time of future payment is the exact time.

The so-called fake usance letter of credit is a kind of financing facility given by the issuing bank to the issuing applicant, in fact, it is a disguised loan to the issuing applicant - the beneficiary of the usance letter is in distress and the beneficiary of the usance letter is issued a usance bill, but the issuing bank pays the beneficiary at sight, and the issuing applicant can take away a full set of original documents from the issuing bank to pick up the goods after the issuing bank has fulfilled the modification procedures for payment to the issuing bank when the usance bill is due to be paid to the issuing bank - there is no problem that the issuing applicant cannot get the documents. If the issuing bank does not accept this, then it will not accept the issuance application of the applicant for a fake usance letter of credit. The so-called financing facility refers to the specific method adopted by the bank to provide financing to the loan matcher—the fake usance letter of credit is the financing convenience that the issuing bank gives to the applicant for this kind of financing.

Since it is a usance bill and it is a kind of financing obtained by the applicant from the issuing bank, the discount interest or loan interest and expenses of the bill of exchange are of course borne by the applicant for the issuance of the bill - the loan must have loan interest.

The discount or loan interest here is, of course, based on the amount of the bill.

As for the amount of discount or loan interest, this is the negotiation between the issuing applicant and the issuing bank before opening a fake usance letter of credit.

The characteristics of a fake usance letter of credit payable at sight are that the bill of exchange is usance and is paid at sight; The paying bank agrees to pay at sight, and the discounting fee is borne by the importer. In other words, the exporter issues a usance bill to the importer, but the letter of credit stipulates that the foreign exchange will be collected at sight, and the essence of this practice is that the issuing bank or the paying bank provides the importer with facilities for financing funds, and the interest to be paid is borne by the importer. The use of fake usance letters of credit as a means of payment allows the importer to have the convenience of working capital provided by the bank, subject to the payment of interest; For the exporter, the bill of exchange can be paid at sight, but it also bears the risk of recourse before the bill of exchange matures.

The usance letter of credit refers to the letter of credit that not only stipulates the issuance of a usance bill, but also stipulates the payment when due, and the issuing bank or the paying bank receives the bill of exchange and documents that conform to the letter of credit, and the bill of exchange is signed and accepted, and the beneficiary can also discount the accepted bill of exchange. If the letter of credit stipulates that the discount fee is borne by the buyer, the letter of credit is a fake usance letter of credit.

Hopefully

To put it simply, it is a fake usance letter of credit, and the fake for the exporter is that they can collect foreign exchange immediately without waiting for the expiration of the letter of credit; For the importer, they have an extra discount fee and enjoy the grace of the payment term of the letter of credit.