A letter of credit allows you to receive the export contract payments due to you by moving the payment risk of your export contract from your overseas buyer to your bank in Australia.
However, there may situations where your bank may not be willing to take on this risk, due to a limited risk appetite.
Our documentary credit guarantee can help you to protect your export revenue and finance new export activity, by assuming the credit risk for your transaction.
This allows your bank to confirm that it will make the payments that are due to you.
In addition, if your bank is comfortable with your ability to meet your performance obligations under an export contract, our guarantee can also allow them to discount the payments you will receive and make additional working capital available to you.
How does the documentary credit guarantee work?
- Increased confidence you will receive payment, assuming you comply with the terms of the guarantee
- No recourse to you if the buyer’s bank doesn’t pay your bank
- May enable your bank to advance additional working capital to you