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Deferred LC Program
The deferred LC must be transferable and divisible.
Our deferred LC program is a COLLATERAL FIRST PROGRAM:
Procedure for deferred Payment Letters of credit
- A written application for the facility is required which will require an application form. Upon consideration of the application a registration fee is then required. The fee will be in the currency of the transaction being taken into account
- Where the commodity being purchased is in the hands of the client by means of contract or pro forma invoice
- It is then necessary for the counter parties to sign an agreement between themselves (Exporter and Importer) – all matters that are necessary to be done are done so only under the terms of the agreement (unless changes are made mutually between the parties which will be in writing and properly signed). It is part of the agreement that all charges involved with the letter of credit of whatever nature shall be for the account of the client – such charges will be calculated in advance and divided by the number of units involved in the transaction the result added to the unit cost
- It is then necessary for the client to open a letter of credit to the bank account of (to be announced when transaction starts)
- In basic terms the letter of credit shall be standard for the opening bank but in particular:
(When the transferable deferred LC arrives at our export house, we transfer to the supplier. The end supplier receives it in Non-transferable form).
- Irrevocable
- Transferable
- Divisible
- Unconfirmed (some banks may need to be confirmed at buyer cost)
- Deferred payment for either 90
- Opened for the account our Export House of which we will announce
Our finance partner will then arrange for confirmation of the letter of credit.
The confirmed – deferred payment letter of credit will then be transferred to the seller perhaps a shipper as well as an insurer — who will when the credit conforming documents are presented to the bank will be paid.
When proceeds of the letter of credit are available they will be distributed by our Export House in accordance with the terms and conditions of the agreement.
It is very important exporter and importer understands the above.
Registration fee: $25,000.00 USD.
Application: It is under the financial services application section of this web site.
And note: The $25,000.00 USD registration fee for the deferred L/C program above is refunded to the client once goods are shipped and documents submitted to bank and when the banks pay. In the event the registration fee is paid and the client does not finish the transaction, then the registration fee is considered earned.
Procedure:
- We receive the application
- Registration fee (where to send it is given after review of application)
- We must be instructed are we supplying the product too or only doing the confirmation for at sight L/C for the importers supplier. If we are supplying product, then we need all data on what the product is, quantity, specifications, destination port, etc
- If we only handling the at sight confirmation of a deferred L/C, then we need copy of pro-forma invoice of importers supplier (and copy of contract between supplier and importer if using one) with specific per metric ton or specific unit cost on CIF basis. We will then calculate 90 day deferred finance charge and give the new per MT or per unit cost for the importer to prepare ICPO. Once we give the new price CIF, then the L/C verbiage is gone over and approved
- We will need the name and address, town and country of the bank to open the deferred LC so we may approve for our adding confirmation of at sight basis to it
- We will need a client profile
- Deferred LC opened (transferable to our export house) and then we have it transferred to supplier with Std Charter Bank confirmation added to it with at sight basis. Importer gets deferred LC basis, and supplier receives an at sight confirmation added to the deferred LC
- Supplier ships per contract
