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LETTER OF CREDIT

A letter of credit (LC) serves as a crucial payment instrument in international business, especially for enterprises involved in the export and import of goods. Aura Vision Advisors, a trusted letter of credit provider in Dubai, facilitates trade deals by offering reliable letters of credit for both import and export transactions.

Businesses operating globally often encounter unknown suppliers, necessitating payment assurance before initiating transactions. The letter of credit becomes crucial in providing payment assurance to suppliers, establishing trust in international trade.

TYPES OF LETTERS OF CREDIT (LC):

Sight Credit: Involves documents payable upon presentation, offering immediate funds for the beneficiary.

Acceptance Credit/Time Credit: Deals with bills of exchange payable after a specified time, providing flexibility for payment.

Revocable and Irrevocable Credit: The former allows modification or cancellation by the issuing bank, while the latter’s terms are binding.

Confirmed Credit: Involves a second bank guaranteeing the letter of credit, adding an additional layer of assurance.

 

How a Letter of Credit Works:

Seller Protection: The bank issuing the letter of credit ensures payment to the seller if the buyer fails to fulfil the payment, provided the seller complies with outlined conditions.

Buyer Protection: A letter of credit can protect buyers, ensuring payment only upon the successful delivery of goods or services.

Advantages of a Letter of Credit:

  • Enables transactions with unknown partners or in new business setups, facilitating business expansion.
  • Secures the seller/exporter in the event of buyer/importer bankruptcy, transferring the credit risk to the issuing bank.
  • Allows customization of terms and conditions between business partners for each transaction.
  • Resolves disputes by allowing the exporter to withdraw funds as agreed in the letter of credit.
  • Provides certainty in payment terms with the phrase ‘pay later, go ahead.’

How We Can Help You:

Aura Vision Advisors, a leading letter of credit provider in Dubai, offers a wide range of services and assists in preparing necessary documents, making the process seamless and trouble-free. With extensive experience, our professionals provide expert consultancy and tailor letters of credit to meet your specific funding requirements efficiently.