The documentary letter of credit is a common method of payment, particularly in non-European trade.  

The importer’s bank undertakes to pay the exporter, a promise which is fulfilled once the required documents have been presented and the credit terms complied with.  

Once the documents representing the goods have been presented, the importer’s bank validates them and pays the invoice.  

If as the exporter you are unwilling to bear the bank and country risk of the issuing bank personally, LBBW can hedge your risks by adding its own confirmation or a silent confirmation, taking into account any extended payment terms which might have been agreed with the buyer for reasons of competition or similar. The resulting short or medium term receivable can be bought by LBBW from the exporter to reduce the strain on the balance sheet (forfaiting).  

You will find the forms needed to open a letter of credit (import and export) and for document presentation (export) under Forms & Checklists .  

Ask our Trade & Export Finance Experts for checklists related to business with letters of credit.