Letters of Credit / Documentary Credits Guide (February 2024) - Trade Finance Global

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        Trade finance is a tool that can be used to unlock capital from a company’s existing stock, receivables, or purchase orders. Explore our hub for more.

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        BoL, BL or B/L, is a legal document that provides multiple functions to make shipping more secure.

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        Purchasing commodities from Africa, the US, and Europe and selling to Europe, a metals trader required a receivables finance facility for a book of their receivables/customers.

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        An energy group, selling mainly into Europe, desired a receivables purchase facility to discount names, where they had increased sales and concentration.

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        Rather than waiting 90 days until payment was made, the company wanted to pay suppliers on the day that the title to goods transferred to them, meaning it could expand its range of suppliers and receive supplier discounts.

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BAFT-Letter-of-Credit-Cover

Letters of Credit / Documentary Credits Guide (February 2024)

Issue 09 . Feb 2024
This guide by Trade Finance Global (TFG) and the Bankers Association for Finance and Trade (BAFT) highlights the role of Letters of Credit (LCs) in global trade, especially amidst complex macroeconomic and geopolitical uncertainties. The guide notes the increasing adoption of LCs, as documented by the International Chamber of Commerce's (ICC) 2023 Trade Register, reflecting their importance in securing transactions amid fluctuating economic policies and trade tensions. The guide aims to demystify LCs by offering insights into their operational framework, legal underpinnings, and practical usage, making it valuable for both seasoned finance professionals and newcomers to trade finance.
16 Feb 2024 Published by
David Meynell
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