New to Letters of Credit

[Queen Seok Duk]

I haven't done any import or export before. Contemplating importing goods on my own instead of getting them from sole distributor.

Is there a minimum amount before any bank allows you to invoke Letters of Credit ?

Do you get a 3rd party to inspect the goods before they're loaded for shipment ?

 

[sleaguepunter]

not that i want splash cold water, but what make u think the manufacturer will sell to you when the company already have a authorised distributor here.

As for opening a L/C account, most local banks will need colleratral. Charges varies according to banks. If you cannot settle upon presentation of L/C, it can convert into TR provide the bank allow you. At TR, you will have 90-120days (varies with banks) to make full settlement and interest rate normally shd be prime rate (again varies with bank and terms you have with the bank).
As for a third party surveryer, normally just present the commerical invoice with packing list together with the B/L or Airway Bill will be sufficient.
for local banks, no harm try for OCBC or Maybank. UOB a bit stuck up, like dont want your biz, DBS ask many questions and documentations but never follow up.
L/C generally not like by bizman as too many fakes around. Never never accept L/C term with the following countries, India, Indonesia, Africa countries. Better be cash payment.

 

[Logisex]

Banks don't entertain walk in customers with LC or asking for LC applications unless you have a company with at least 3 years of positive financial records (i.e. making profits). You will also need to have a facility with the bank for opening of LC, which might take some time to approve. You can still open an LC with 100% cash margin if the bank does not grant you a facility. As for financing, its still possible as the issuing bank is using the negotiating bank's limit but its normally with recourse .

 

[Queen Seok Duk]

My main purpose is to limit risk. I don't know the suppliers well enough, they could all be stationed in Europe, and could be small factories.

If I have 100% paid up in the bank, why wouldn't the bank issue a L/C ? It's like a Debit Card, just that I need someone over in Europe to verify that the goods are shipped before I part with my money.

If I don't use LC, are there other alternatives ?