LETTER OF CREDIT (LC application) PROCESS
As requested, below is the step by step process of how our Letters of Credit work from start to finish.
Step 1: Application. Send us the LC application
We will review and let you know if anything is missing or if there are any problems ASAP. We then create a draft for you and the supplier to review.
Step 2: Review of Draft and Opening Fee Payment. Once the buyer and supplier are happy with the draft (they can request as many changes as they like until they are satisfied), then they are ready to proceed with the LC. You will wire the opening fee into our account and, upon receipt of the wire, we will release the LC to the bank to issue. If the wire is received before noon, the LC will most likely be issued later that day. After noon, the LC will be issued some time the following day.
Step 3: LC is Issued. The bank sends us confirmation that the LC was issued and transmitted to the advising bank (i.e. supplier's bank) and we send you a copy of the transmitted LC SWIFT sent by our bank, including the LC number for reference. The supplier receives the LC confirmation at their bank.
Step 4: Presentation of Documents. When the supplier has prepared the goods and loaded them onto the ship, they must present the documents for that shipment to their bank, which will then transmit the documents to our bank. We will email you copies of the presentation (and all the documents submitted by the supplier) for approval.
Step 5: Payment for Goods. Before our bank will release the original documents to us for you, we must receive payment for the documents. Upon receipt of payment from you, we send the documents overnight to the freight forwarder or wherever you would like us to send them.
General
a) There are more banks that we work with now
Banks that we work with are Bank Hapoalim, Bank Leumi,Santander, Sterling Bank, Habib Bank, Hanmi, IDB Bank, Winter Bank (Austria)and Bank of America. All of them are Class A banks. Depending on the beneficiary and the LC amount we will choose the bank that will issue the LC.
b) Opening Fee Structure:
LC opening fee is 5.5% for an LC up to 90 days + $250 bank processing fee ( min $1000 and we charge utilization fee $500 upfront if presentation are made when good arrive we credit back 500$). Every additional month costs 0.5% extra.
What you/the buyer needs to do
1. See the form in our secured https:// website download it to your computer, you must have Adobe reader, print to PDF and type in digitally, (it is free to download). Letter of Credit (LC) form (3 pages)
2. Fill the Letter of Credit application form by using your keyboard (no need to print it out, scan the document and so forth) and complete (all 3 pages), save and attach to your email and send it back to us.
2. If you/the buyer is not comfortable to sign/stamp the form without knowing which US company is involved- then send it anyway, back to us with all your filled information and we will send it to our American associate. And you may sign/stamp later as they will contact you/the buyer directly.
We make it very simple and convenient for all our clients.
Note: We will NOT accept any uncompleted Letter of Credit application form.