Can your company accept usance letters of credit?
2022-04-29   July

I. Before opening a usance letter of creSome of our customers may ask, "Do you accept usance letters of credit? YEPBOX tries to provide all kinds of facilities to our customers and usance letters of credit are one of the types of transactions that we often operate. However, compared to  letters of credit  at sight and T/T, usance letters of credit, especially those over 90 days and for larger amounts, are treated with more caution by YEPBOX and the business process is more strictly controlled and the procedures can be more complicated.


1. YEPBOX needs to provide specific information about the customer's country and the bank (name of the issuing bank and SWIFT) to determine whether there is a test key relationship between the our bank and the issuing bank.

2. Our bank confirms the existence of a test key with the issuing bank, then it can be accepted, the lette

II. Receipt of Usance Letter of Credit

1. The customer needs to send us a draft of the letter of credit for confirmation and the original can be opened after the confirmation is correct.

(1) Whether the receipt and payment information is correct and complete

(2) Whether the letter of credit is revocable

(3) Whether the documentary requirements set out in the L/C can be met

(4) Whether the information on the goods is correct

(5) Whether the shipment information is correct

(6) Whether the terms of the letter of credit are consistent with the contractual agreement

(7) Whether there are special terms and conditions and whether they are acceptable to us 

2. Receipt of the original Usance letter of credit

After we have confirmed all the information, we can ask the customer to open the original letter of credit. Once we have received the original L/C, we prepare the documents to our bank in accordance with the L/C requirements. Our bank will review the documents in accordance with the L/C requirements and inform us of any discrepancies, and we need to confirm with the customer whether the discrepancies are changed or accepted.

For larger Usance letters of credit, we also deal with the bank on a forfaiting basis, where YEPBOX provides the bank with the amount of the letter of credit, the term, the issuer's information etc. and the bank goes to the secondary market to request quotations and find a buyer.

In short, a forward letter of credit can be relatively complicated in terms of formalities. Also, if the amount is too small, we do not advise our clients to use this expensive method of transaction, as the associated bank charges are high and these costs will be more or less borne by the client. Of course, if a client has to choose a usance letter of credit for financing purposes, YEPBOX will do its utmost to accommodate the client.