Trade Finance Services
Export or import with confidence
INTRUST can help facilitate international trade by offering the tools you need to give you more confidence as you conduct your business across borders.
Letters of Credit
Bridge the buyer/seller gap
Letters of credit perform the dual roles of mitigating credit risk and of being a vehicle for payment. These are common instruments, but complex as well, so having experienced international bankers there to guide you is essential.Learn More
As an instrument of international finance, bankers' acceptances normally result from a commercial letter of credit, which requires a time draft. The seller may choose to finance the transaction by carrying the receivable, confident in the knowledge that payment is guaranteed by the bank which accepted the obligation to honor the draft at its maturity; hence Bankers' Acceptance. Conversely, the seller may wish to collect payment early by selling the acceptance at a discount.
As a means of collecting foreign receivables, directing inward remittances and in some cases, mitigating the risk of selling an open account, documentary collection is a simple, cost-effective tool. Documentary collection is a draft or demand for payment with commercial documents, usually an invoice and a bill of lading, attached to a collection letter. This method of collecting receivables is especially effective when used in connection with a working capital line of credit, as it can trim days off of the collection cycle, which reduces reliance on borrowed funds.
Commercial transactions across international borders incur elements of risk that need to be managed. These include country risk, credit risk and exchange risk, and they fall into the categories of actual loss or loss of opportunity. The terms under which a sales contract is written, determine the extent of the risk. INTRUST International Banking professionals can help you identify and mitigate the risks associated with global trade.
For more information about our International Banking services, contact an International Banker.