Why should you go for an LC confirmation?

 

While running an exporting business, people have to face a lot of logistical challenges. One of the most common and very serious logistical challenges that almost every exporting business faces are having a constant flow of capital. Exporting is a very costly process and requires a lot of capital to run the business. Hence, while exporting goods from one place to another, if the buyer defaults and fails to pay the money in time then as a result, the entire exporting process could halt due to a lack of money. For this reason, a lot of exporters relies upon the letter of credit which can supply money in case the buyer default and fails to pay the money in time. And one of the best options for getting a letter of credit is applying for an LC confirmation. 

In a letter of credit, a third-party financial institution guarantees the payment of money to the seller in case the buyer defaults and fail to make the payment in time. As a result, the exporter does not have to face any kind of money crunch and can run their exporting business smoothly. 

However, in case the financial institution also defaults and fails to make the payment, then the exporter will have to face the same problem and the export of goods will have to be halted. However, to avoid such a condition, you can apply for an LC confirmation which will make the payment more secure. 

If you apply for a confirmed letter of credit, then a second financial institution will guarantee the payment of the money in case the first financial institution fails to make the payment in time. Hence, a confirmed letter of credit provides a double guarantee of payment and you can be more assured of receiving the payment even if both the seller and the first financial institution fail to make the payment. By getting a confirmed letter of credit, the risk of default drops considerably and both the buyer and seller will feel more relieved knowing that their interests will be protected by the confirmed letter of credit. 

What Are The Advantages Of Digital Bill Of Exchange?

A lot of people all around the world are involved in the international trade of goods from one place to another. For doing international trade, the people involved in the business need to make financial transactions. And to facilitate this transaction, many people use a bill of exchange in international trade. With the advancement in technology, everything is going digital and the bill of exchange is also no exception to this. A digital bill of exchange is becoming very popular throughout the world.

This increasing popularity of digital bills of exchange is due to the fact that it is very convenient and you can use a digital bill of exchange without going through any kind of trouble. A bill of exchange serves as legal evidence that ensures the seller of the goods that he will receive the transaction amount from the buyer of the goods. Hence, if you have a bill of exchange then you can be ensured that you will receive the amount of money that you are entitled to receive from the buyer of the goods. 

If you use a digital bill of exchange then you can make it even more authentic as it is tougher to damage any kind of digital bill of exchange and the digital bill of exchange can not be tampered with very easily. A digital bill of exchange is also very safe and secure compared to traditional bills of exchange. 

A traditional bill of exchange can take a huge amount of time to be prepared. But since a digital bill of exchange is prepared digitally hence it can be easily prepared in a very short period of time. As a result, you can save a lot of time if you go for a digital bill of exchange instead of a traditional bill of exchange. 

Besides this, there is a risk of losing the traditional bill of exchange, but on the other hand, there is no risk of losing the digital bill of exchange. For all these reasons, if you are looking for a safe and secure way of assuring that you get the payments on time then you can also opt for a digital bill of exchange from a trade finance company.