Commercial Letters of Credit

When sourcing goods from overseas, perhaps the most critical aspect is making the payment. Making international payments can be tricky, especially with the larger sums of money usually involved in sourcing products from overseas. The commercial letter of credit is a tool to make these transactions easier.
Payment for orders placed in overseas factories is almost always made with a commercial letter of credit. Letters of credit allow a bank to act as an uninterested party between the buyer and seller. They have been used for centuries and are a vital, ever-increasing instrument of international trade. They aid both parties by enabling the buyer to prove they can make payment and by reassuring the seller that payment will be received. Here is how letters of credit operate....

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