Small and Medium Enterprises

• Small and Medium Enterprises
• Cash management
• Financing
• Treasury
• Trade
  • Financing receivables
  • Documentary collection
  • Documentary letter of credit
  • Bank guarantees
  • Discounting bills of exchange
  • Financing of distribution channels
• CitiService
• Client Centre

Documentary letter of credit

• documentary payment and securing instrument
• a written obligation of the bank issued at the client’s request (in trade relations, the buyer's request) to pay a certain sum after the fulfilment of the conditions stipulated in a letter of credit
• the banks involved examine only documents, not goods or services

Advantages for the seller (recipient of the letter of credit)

• the seller’s claim is against the bank rather than a claim against the buyer
• if he fulfils the conditions of the letter of credit, he can be certain that payment will be made by the bank, he can use the letter of credit as a guaranty vis-a-vis his own suppliers
• he can obtain funds immediately if he sells his receivable from the bank pursuant to the letter of credit
• based on a high quality export letter of credit, he can obtain a loan from his bank

Advantages for the buyer (principal of the letter of credit)

• the letter of credit creates considerable pressure on the seller to supply the goods by the stipulated time limit and with the required quality
• he has certainty that he will pay only after the stipulated conditions are met
• he can obtain more advantageous price conditions thanks to the increased certainty of the seller to receive payment when fulfilling the stipulated conditions