Advantages of Letter of credit

Letter of credit advantages for the seller

 Reducing the production risk, if the buyer cancels or

changes his order
 The opportunity to get financing in the period between the
shipment of the goods and receipt of payment (especially, in
case of deferred payment).
 The seller is able to calculate the payment date for the
goods.
 The buyer will not be able to refuse to pay due to a
complaint about the goods

Letter of credit advantages for the buyer

 The bank will pay the seller for the goods, on condition that
the latter presents to the bank the determined documents in
line with the terms of the letter of credit;
 The buyer can control the time period for shipping of the
goods;
 By a letter of credit, the buyer demonstrates his solvency;
 In the case of issuing a letter of credit providing for delayed
payment, the seller grants a credit to the buyer.