Export LC Discounting

Liberate Your Bill-Tied Funds with LC Backed Bill Discounting

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    • Understanding Forex Trading and export LC discounting service.

    Why You Need Export-LC-Discounting Service?

    Exporter can get funds through banks which works out to be cheaper

    Under a letter of credit, it is discounting export bills or invoices.
    Discounting is applied after acceptance (in other words, after acceptance to pay on due date has been received from the LC issuing bank).
    The financier needs to have some credit appetite for the issuing bank given that the risk assumption is on that institution.
    Export can get funds Through banking channels.

    Process Flow

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    Advantages of Export-LC-Discounting

    Increase Cash Flow
    Absolutely Secure
    Credit Terms Negotiation
    Liberty of Payment

    Salient Features

    Instant Quotes

    from 99+ financial institutions

    Low Arrangement Fees

    low cost solution quotes

    Most Economical

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    Forex Management

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    Frequently Asked Questions

    It is discounting of export bills / invoices under a Usance Letter of credit. This discounting is done on a post acceptance basis (in other words, after acceptance to pay on due date has been received from the LC issuing bank). Given the risk assumption is on the LC issuing bank, financier needs to have some credit appetite on the issuing bank. Funds are made available to exporter’s bank via banking channels. Discounting can be done for Sight Bills also. For pre acceptance discounting, Client should have the LC discounting limits with the bank.
    Some basic credit check including KYC will be done by the bank. However, as the risk assumption is on the LC issuing bank, generally speaking, credit limits are not required to be in place. Some banks may put in place some credit limits to protect themselves against commercial disputes etc. Therefore, it would depend from financing institutions to financing institution.

    No, however KYC and basic credit check and internal approvals are required to be done with the discounting bank. The discounted proceeds will be remitted to the existing working capital banks.

    One-time approvals are generally needed to on-board a client with the financier which requires basic credit information, KYC, details of counterparties, LC issuing banks and business background and any additional information that might be specifically required for a customer. For each transaction, the financing bank's details (and clauses if any) will need to be incorporated into the LC. It is strongly advised to pre-discuss each transaction to avoid issues later.
    Yes, pre-shipment finance can be availed as LC is treated as a proof of an order. However, pre-shipment finance is dependent on the borrower's credit and therefore the financier's risk is on the borrower (and not on LC issuing bank thus the borrower will need to be a client of the bank). Pre-shipment finance may be extended by the exporter's bank only.
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