LC Payment at Sight is the payment term used in international trade finance to secure trade dealings from financial risks involved. Also, this term assures that the seller will receive the payment, once they fulfilled the terms mentioned in the issued LC at Sight. Since Import LC gives more assurance for payment, this is mostly preferred by sellers, who often do overseas trades.
LC at Sight is an undertaking issued by a bank to guarantee the payment on behalf of the buyer to the seller. Further, to get paid, the seller needs to submit all the documents to the bank as stated in the issued LC MT700. Only if the bank confirms that the submitted documents comply with the LC terms, they remit the funds to the seller. Also, this term is used in certain cases, where the seller needs the remittance as soon as after the shipment is done.
If you sell goods overseas, using a Letter of Credit gives you confidence. Because, with the DLC MT700, you’ll receive payment as long as you ship the products as agreed.
On the other hand, if you’re the buyer who imports goods from overseas, having LC at Sight will help you avoid pre-payments for the goods that never arrive. Also, with LC MT700, you will assure that your funds are safe, until the seller submits the documents stating that they shipped the goods, as agreed in the contract.
Since the name indicates at Sight, many traders think that this assures funds immediately. But it doesn’t. To make the payment, the seller’s bank will review the documents presented against the LC. Also, this is to confirm whether they oblige with all the terms of the issued DLC MT700.
Further, this may take a few business days. Sometimes, for clarifications, the documents to be sent to the beneficiary, before sending it to the issuing bank for releasing the funds. Further, once all the documents are verified and confirmed by the issuing bank, the funds will be released.
A Letter of Credit at Sight is highly favorable for buyers and sellers, as it helps both parties to secure their trade dealings. It’s a kind of Win-Win for both parties!
So, if you’re in need of an LC at Sight for your imports, you need to talk with your bank first. But, to provide LC, banks may require a certain percentage of your deal value as a cash margin.
Many of the traders who don’t have enough cash funds in hand won’t be able to avail Bank Instruments from their bank. Further, this creates a huge loss in their business.
So, to help those traders in need of trade finance facilities, we, the Letter of Credit Providers in Dubai are here for you! We provide DLC MT700 from world-rated banks on behalf of your company without collateral. Moreover, we have the best solutions for every customer in every industry.
Submit your DLC MT700 request today! We will get back to you with a FREE Quote ASAP.
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