Letters of credit and guarantees
We would like to offer you within the trade finance program an alternative to prepayment, namely, special banking instruments (letters of credit and guarantees) that will satisfy any partner, reduce trade risks and optimize to a considerable extent the cost of a transaction.
A letter of credit is a special bank account in which funds can be reserved for settlements with a supplier. A letter of credit is opened for each supplier with whom you make settlements. A supplier can receive funds from a letter or credit only upon submission to the Bank of the documents acknowledging fulfillment thereby of the contractual obligations (delivery of goods, performance of works, provision of services).
A guarantee is a bank’s suretyship of fulfillment by a customer of monetary or property obligations, on the ground of which the bank must pay to a counterparty at the request from the latter a specified monetary amount upon occurrence of the conditions provided for by the respective obligation.
Advantages of the instruments from Banca Intesa
- availability of credit lines for foreign trade financing from leading foreign banks;
- issuance of guarantees for customs authorities;
- issuance of guarantees for tax authorities