Commercial Letters of Credit

Commercial Letters of Credit Overview

What is a Commercial Letter of Credit?

A Commercial Letter of Credit (LC), also known as an Import Letter of Credit issued by SterSavings is a financial tool that guarantees payment to foreign suppliers for sales made to a SterSavings customer. It is a written instrument issued by Ster Savings Bank and provided to the seller, assuring that SterSavings is obligated to make the necessary payment based on the terms, conditions, and documentation required under the letter of credit.

Why would I need a Commercial Letter of Credit?

The value to the seller is the highly rated credit of SterSavings , the skill and expertise of our trade processing staff, and the underlying rules under which the Bank performs its duties. By issuing an Import Letter of Credit through Ster Savings Bank, your foreign sellers know that a bank of good standing and strength is there to back your sourcing needs.  As the buyer, you benefit not only by minimizing your risk of paying for goods before you gain title to them, but you also are in position to negotiate better pricing because of the financial support the letter of credit offers.

How it works

  • You and your supplier agree on a sales contract with a letter of credit as the terms of sale
  • Your company requests that SterSavings issue the LC in favor of the supplier and advised through the supplier’s bank
  • The supplier’s bank then advises the LC to the supplier
  • The supplier ships their product to your company and presents the necessary documents to the advising bank, who in turn submits the documents to SterSavings in order to seek payment
  • Presuming that all documents meet the language of the LC, your company’s account with SterSavings is debited at the proper time  
  • SterSavings  then pays the supplier through their advising bank
  • Additionally, we allow you to issue, track and report your import activity online through  SterSavings  eConnect Global®

Let’s Talk

 

Subject to credit approval. Some restrictions apply.