LETTER OF CREDIT (LC)
Trade Payment Support for Eligible Procurement
Explore bank-issued Letter of Credit facilities for qualifying domestic and international procurement transactions.
- Facility: Documentary Letter of Credit
- Application: Eligible Trade Transactions
- Terms: Sight / Usance, as Applicable
- Margin & Security: Bank-Specific
Overview
Support for Documented Buyer–Supplier Transactions
Capital Yono assists eligible businesses in exploring Letter of Credit facilities issued by suitable banks for approved procurement. The issuing bank assesses the applicant, supplier, underlying contract, documents, permitted transaction terms, margin and security.
The facility operates under the terms of the issued LC and the applicable documentary requirements. It must not be described as an unconditional upfront cash loan.
Suitable Transactions
- Domestic procurement under accepted trade terms.
- Eligible international import transactions.
- Approved sight or usance payment arrangements.
- Other qualifying supplier-payment obligations.
Preliminary Screening
Institutions may review the applicant’s profile and banking limits, supplier and country eligibility where relevant, purchase contract, permitted goods, LC value and validity, documentary terms, margin and collateral.
Documents to Keep Ready
- Entity KYC and banking information; supplier details; purchase order/contract; proforma or commercial invoice; proposed LC terms and documentary requirements; GST/IEC and approvals when applicable; financials and existing trade limits.
FAQs
Can LC facilities be used for domestic and international procurement?
Eligible domestic and international transactions may be evaluated under the applicable bank product and trade requirements.
What is the difference between sight and usance LC terms?
The payment timing and documentary conditions differ under the respective LC terms. The issuing bank and underlying agreement determine the permitted structure.
Does an LC guarantee payment irrespective of documents?
No. Payment and honour are governed by the issued LC terms and the applicable documentary requirements.
Is export LC-backed pre- or post-shipment finance the same page?
No. Those are separate export financing products in the Import & Export Finance category, with their own eligibility and transaction-stage requirements.
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Discuss Your Letter of Credit Requirement
Share the procurement purpose, supplier details and proposed trade terms for preliminary evaluation.
Funding is subject to eligibility, appraisal, due diligence, approval and final terms from the relevant funding provider.