Bank To Bank Lcs

[terdsak_12]

I've a client in the UK who's buying our products. Usually he pays directly to our account, but as the figures are getting higher he wants his bank in the UK to issue an LC to our bank (Bangkok Bank), he says once the LC has been issued we can get the cash from our bank, and once we've shipped the goods and presented our bank with a BL (Bill of Ladding) to our bank they will be able to claim the funds from his bank in the UK. This will be from one business account to another.

Anyone have any ideas about this, and can it be done? I'll be calling the bank on Monday.

Cheers.

[Axel]

There are millions of letters of credit issued everyday around the world.

Once you receive an LC you might discuss with your bank to get an advance payment on part of the full amount to pay for raw materials or whatewver. But usually the banks in Thailand want to see some other guarantees like a mortgage on your hosue etc. before they give you the loan.

The LC will specify certain documents, usually, invoice, packing list, cert. of origin, bill of lading etc. and as well specifies in details how the documents are to be issued. Make sure this is followed accurately to the last dot and comma. Any slight mistake/typing error will cause a discrepancy, means your bank will release payment only after your buyer confirmed to take up the (wrong) documents anyway. Each discrepancy costs extra fees.

You must understand that especially the bill of lading is a tradition paper and the LC-baks are dealing only with the papers, not with the merchandise. Your buyer's advantage, he can be (nearly) sure that you did ship out the goods b4 his money is released. Your advantage, the documents representing your goods will only be released once the LC-conditions are fulfilled. So both parties are safe.

[ASIC]

If your business is in good standing, you can try to sell the LC to the ExIm Bank on Phaholyothin Road. (Export-Import Bank). That's what they are there for anyway. However, these days they are a bit concerned and will check you out carefully. Seems like someone has been shipping empty containers lately.

ASIC