Export letter of credit ( lC ) :  

Trade financing solutions for imports :

Import financing includes a wide range of business financing methods that are provided to finance import transactions. From import letters of credit and import bank guarantees to invoice factoring and financial instrument monetization, import financing is all a part of Fardad Spadana Commercial services that make cross-border trade easier, more profitable and less risky.

Import financing solutions

Import financing is a specialized trade financing solution used to finance the purchase of goods that are exported from one country for import to another country. Import financing makes much more usage than cash advance payments for goods, even though the money Have enough cash on hand as import financing offers more benefits than just payment methods.

Import financing solves many of the problems of sending international money. When you choose “Commercial Fardad Espadana” as a financier, guarantees are provided for importers and exporters that ensure successful and transparent transactions.

To meet the growing demand for trade finance and to minimize the impact of the global trade finance shortage, Global Trade Finance offers a range of import finance solutions that enhance the ability of merchants to trade globally, your cash flow will improve and risk-free and provide your business profitably.

With global experience, unparalleled expertise in issuing insurance policies, and an impressive group of strategic partners, we provide you with respected manufacturers and exporters with the help of an experienced transaction team that seamlessly accompanies you to finance your business needs.

Import financing methods :

A letter of credit is the most widely used type of import financing around the world. A letter of credit is a financial instrument that is issued by the importing bank and authorizes the exporter to withdraw money from the bank.

A letter of credit is issued in favor of an unspecified beneficiary (exporter) for a specified amount and with an expiration date. The letter of credit specifies the terms and conditions of payment.

To receive payment from the importer's bank, the exporter must provide documentary evidence of the goods according to the terms and conditions contained in the shipping letter of credit. Required documents usually include an invoice or purchase receipt, bill of lading confirming the delivery of goods, insurance documents, inspection reports and other export documents.

When the exporter submits the correct documents along with the withdrawal request to the importing bank, the bank is obliged to pay the desired amount; Even if the importer has not provided the relevant funds.

Depending on the conditions specified in the letter of credit, the payment can be in the form of a money transfer in the form of a draft or a promise to pay as a long-term draft.

The promise of payment is often in the form of a promissory note (an interest-free note that obliges the issuer to make a payment at a certain time in the future) and is used to reduce cash flow pressure for exporters; A bill of exchange is also considered as a means of payment.

Sometimes a trusted third party (usually a large international bank) provides a letter of credit guarantee to protect the exporter in case the issuing bank fails to pay; In this case, they are known as letters of credit.

A letter of credit leads to the cancellation of the importer's obligation to pay for the goods before shipment; Because the importing bank practically guarantees that the payment will be made when the bank receives the documentary evidence that the goods have been shipped. The letter of credit eliminates many of the risks inherent in international trade, so it can be expensive and if accurate regulated, they may be difficult to enforce and likely to lead to costly legal battles.

In document collections, the sale of goods is settled by banks through the exchange of documents. The exporter provides documents to his bank that show the shipment of the goods through the bill of lading. The exporting bank sends the bill of lading to the importing bank and receives an amount in exchange for settlement of the invoice.

Settlement can be a transfer of funds or a promise to pay, such as a bill of exchange. In documentary collection transactions, the importing bank does not guarantee payment; Therefore, if the importer does not accept the goods, the bank will not pay the desired amount. In documentary collections, the ownership of the goods does not reach the importer until the payment is made; Therefore, the exporter can take back the goods. However, retrieving goods from places in foreign countries can be difficult and expensive, but "Commercial Fardad Spadana" can facilitate all matters related to financing the import of goods and in this way be a reliable companion of your company.