What is the accreditation description?
loan procedures is a term used to describe the process used for the request and obtain a letter of credit, as well as the way this letter of credit (LC) is used, especially as a means of purchasing goods produced and selling the seller or exporter. This process will usually include the consideration of the buyer's sources and rating by the Buyer's credit, working with the seller's receiving bank, and in general that the Accreditation is accepted as a guarantee of payment and can serve as a basis for continuing the transaction. Many exporters require that this type of financial instrument be prepared as part of the trade in international buyers who are generally referred to as importers.
The commencement of the accreditation procedure begins to the buyer that a formal LC request to the bank or financial institution of its selection. In the evaluation of this application, the bank will look close to the financial situation of the applicant has established a decision on factors such as the total liquid assets that are introduced, the applicant's credit rating and the risk levelKa associated with the approval of the application and issuing a letter of credit for a specific purchase or even collection of purchases. Once the bank finds that the applicant is a credit, LC is issued and can be handed over to the Seller's bank.
From there, the seller can work with his bank to observe the conditions found in LC, such as progressing funds that can be used to produce and send the order. This stage of the loan procedure focuses on obtaining a completed order in the hands of the buyer. After confirming the receipt of the order, the issuing bank issues the payment to the receiving bank and the process is considered complete.
The viable letter Credipostup T helps protect the interests of all the parties concerned. The buyer actually does not pay for orders until they are delivered. At the same time, sellers can use the Accreditation to obtain advances from the receiving bank for the purpose of driving the cost of producing goods associated with the order and covering costs for shipping,rather than use other sources to manage this part of the process of fulfilling orders. The real accreditic procedure must comply with the business laws that apply to the nation in which the buyer is based, as well as the country where the seller is located.