FirstMerit E-Global Trade
Commercial Letters of Credit
Standby Letters of Credit
Export Letters of Credit
Documentary and Foreign Collections
Foreign Exchange Service
Customer Service
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Commercial Letters of Credit
When you purchase goods overseas, the seller may request you to provide a commercial
letter of credit. The letter of credit provides the seller with assurance that payment will be made
consistent with the terms of the letter of credit. The issuing bank substitutes
its creditworthiness for that of the buyer.
FirstMerit issues the letter of credit to an advising bank in the seller's country. The advising bank then forwards the letter of credit to the seller. The seller determines his compliance with the letter of credit, ships the goods, prepares proper documentation and then presents them to the advising bank. The advising bank then forwards documentation to FirstMerit. If documents comply with the terms of the letter of credit, payment is made to the seller immediately (sight draft) or at a future date (time draft).
Features
- Bank substitutes its credit worthiness for that of the buyers
- Letter of credit is payable upon presentation of proper documents
Benefits
- Letter of credit is readily accepted by overseas sellers
- Assures payment to the seller
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