Letters of Credit

Letters of Credit

This is also often called “Trade Financing for Importers”.  If you rely on imported goods to sell to your US or Canada-based customers, Amerisource can help you enhance your relationship and terms with your international suppliers.

Your foreign supplier may ask for pre-payment before goods are shipped (commonly referred to as cash-in-advance, or “CIA”).  Your supplier might also ask for payment through a secure instrument such as a Letter of Credit (“L/C”).

Amerisource’s purchase order financing enables a company to purchase goods from a foreign supplier when the supplier will not extend open account payment terms to the importer.  In essence, this allows an Amerisource client to obtain “inventory financing”.  Key Trade Finance services available for existing financing clients include:

Irrevocable Letters of Credit – Amerisource issues an L/C guaranteeing payment to a vendor for a specific shipment once vendor has met all of its obligations to you under the contract or purchase order.  While most bank-issued L/Cs require the L/Cs to be cash-secured, Amerisource allows for the accrual of security over time.  This allows you to avoid paying your vendor CIA terms, maximizing your working capital and minimizing your transaction risk.  Amerisource L/Cs are accepted worldwide.

Standby Letters Of Credit – Amerisource issues an L/C which remains “open” (on standby) for a pre-specified period of time.  This is designed to help you obtain open payment terms with your overseas supplier.  Standby L/Cs are typically bound to a sub-limit under your existing credit line with Amerisource.

Standby Vendor Guaranty – Amerisource issues a guaranty for payment to your supplier, designed to enhance your existing credit relationship.  Standby Vendor Guarantees are typically bound to a sub-limit under your existing credit line with Amerisource.