LC Discounting

1. For businesses that export or import, letters of credit are the financial security of international trade. A letter of credit allows an importer to make sure that an order is filled and shipped before payment is made and the exporter is guaranteed that money will paid for the goods shipped overseas. The discounting of letters of credit allows exporters to get their money faster.
2. Letter of Credit Discount (LC Discount) The Letter of Credit from the prime banks or financial institutions is considered as a complete security. A borrower can offer the LC to the lender and get the loan sanctioned. The loan amount may be up to 100% of the LC value. Once the Letter of Credit is executed the amount against LC is settled by the lender against the loan disbursed to the borrower.

Letter Of Credit Discounting helps the business persons to raise finance quickly for a shorter period of time.