LC Discounting

Letter of Credit Discount (LC Discount)

The Letter of Credit from the prime banks or financial institutions is considered as a complete security.

A borrower can offer the LC to the lender and get the loan sanctioned.

The loan amount may be up to 100% of the LC value. Once the Letter of Credit is executed the amount against LC is settled by the lender against the loan disbursed to the borrower.

Letter Of Credit Discounting helps the businesspersons to raise finance quickly for a shorter period of time.

Benefits of LC Discounting

  1. Enables you to receive payment more promptly – you won’t have to wait for your buyer to pay you at a future date.
  2. Helps you to improve your cashflow.
  3. Gives you the ability to offer your trading partner longer payment terms, which can put you in a stronger negotiating position and improve your relationship.
  4. Allows you to pay your suppliers early and can help place you in a position to negotiate better pricing.