LC Discounting
Several banks and financial institutions offer LC discounting facility also known as LC. These LC discounting are often availed by businesses who engaged in export-import trade sector. Typically, the interest rate charges range from 6.00% - to 10.00% per annum.
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Document required for LC Discounting:
- Invoice Bill
- Drawn under irrevocable
- According to LC clause, beneficiary bank needs to submit compulsory documents
- Bill of exchange documents certifying Bonafide trade transaction.
Step by Step Process of LC Discounting
The entire loan is seamless, following the step-by-step process of LC discounting that need to be taken into consideration by buyers who wish to apply for letter of credit.
Step 1: - Buyer must apply for LC
Step 2: - After applying LC by Buyer, Seller bank should issue letter of credit.
Step 3: - Bank will examine the documents and if get satisfied then only give the confirmation on LC.
Step 4: - Seller/exporter will dispatch the goods to importer.
Step 5: - Issuing bank might ask exporter to submit transportation documents.
Step 6: - Once, the issuing bank accept Letter of credit documents, thereafter notification will be sent to seller bank by importer bank.
Step 7: - LC discounting shall be granted, and funds will be credited upon the acceptance.
Financeseva helps exporter/importer to grow their business with a solid invoice factoring solution. Small medium enterprises can avail 80% of invoice value will be discounted.