Many countries are preparing themselves to lift restrictions to protect its economy from the aftermaths of COVID -19. And this increases the demand for PPE supplies, especially gloves, masks, and thermal checking and screening devices. Further, to meet this emerging demand and to earn handsome profits; an Indian trader decided to import Thermal Camera by using Usance LC as a payment term.
The Client is an authorized CCTV Distributor in India. To grow their business and to raise their ROI, they decided to purchase IR Camera Kits; and then supply it to the local markets – shopping malls, bus terminals, metro stations, schools, etc. This business idea seemed to be the good one for them; but, on the other hand, they were hesitated to do dealings with unknown supplier. So, they decided to choose one of the known suppliers from Dubai, UAE.
They negotiated with the seller; and convinced them to supply these cameras kits on the basis of Usance LC Payment term. As the buyer runs an authorized CCTV distributor in India. So, the seller agreed to supply the kits based on the stated payment term. And then, the buyer sent their requirement to the seller and asked for the BOQ. Since the quoted price seemed to be normal; the buyer agreed to it and signed the contract with the seller.
Since the client has already used their banking facility, they were unable to receive the MT700 from their bank. So, they started looking for trade finance providers outside the bank. By understanding the buyer’s requirement, the seller referred Bronze Wing Trading, the Letter of Credit providers in Dubai to the buyer. Further, with the seller’s reference, the buyer contacted us with their request.
Once we received the request from the buyer, our team studied their deal and approved their request to issue LC MT700 on their behalf. Then, we asked the buyer to sign the service agreement and pay the service charges to start work on their trade deal. Accordingly, they signed the agreement and transferred the charges to our bank account. Then, we structured their deal and sent the LC draft for their approval. Further, the client reviewed and approved the draft; also, they paid the LC issuance fee. Once all the process was done; we requested our bank to issue the Deferred LC on behalf of the buyer and in favor of the seller.
As per our request, our bank issued the LCs to the seller’s bank via Swift MT700. Once the seller received the MT700 in their favor; they got assured that they will receive the payment; after the shipment of goods. So, they shipped the required – High Tech IR Cameras Kits to the buyer’s port.
Since the seller supplied the goods within the set time limit; so, the bank releases the payment to the supplier at the maturity date. On the other hand, the buyer received the goods at their port; also, started to supply it to their local markets and earn good amount of profit.
This is how we, Bronze Wing Trading L.L.C., the Letter of Credit Providers in Dubai helped the buyer to purchase Thermal Camera kits from Dubai using Usance LC.