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Letter of Credit

What is a Letter of Credit?

A letter of credit is a letter from a bank that provides important guarantees. It can help businesses to trade internationally, whether you’re the business who’s importing or exporting the goods.

For businesses exporting, the risk is that you will send goods but never receive payment from the customer. A letter of credit provides you with a bank guarantee that you will be paid in the event your customer is unable to settle the debt.

Importers, meanwhile, may fear that they will send payment for goods they never receive. A letter of credit means they benefit from knowing they will receive the goods ordered before having to pay.

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What are the benefits of a letter of credit?

  1. Exporters gain peace of mind that they will be paid for their service, even if their customer goes out of business
  2. Importers know they won’t have to pay if the supplier fails to fulfil the order on time, and could negotiate a better price
  3. Letters of credit enable businesses to trade in confidence with businesses in overseas markets they may not be familiar with
  4. A bank letter of credit is an internationally recognised, secure method of settlement
  5. They can also help the exporter to secure an invoice finance facility, to bridge the cash flow gap arising from trading on credit terms
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How can I secure a letter of credit?

Whether your supplier has asked for you to set up a letter of credit or you would like your customer to do so, Hilton-Baird Financial Solutions can help guide you through the process.

As an experienced commercial finance broker, we’ll introduce the most appropriate providers based on your specific requirements. We can also help you with other methods of trade finance, designed to reduce the risks of working with international suppliers and clients. 

To find out more about how we can help, call us on 0800 9774833 or email info@hiltonbaird.co.uk.

I was delighted with the quick turnaround. It was exactly what I wanted and I was extremely impressed with the service I received from Hilton-Baird that enabled this.

Heulwen Holt, Managing Director, Ceredigion Couriers

Some of the funders we work with

  • Lloyds Bank Commercial Finance
  • Metro Bank SME Finance
  • Ultimate Finance Group
  • Peak Cashflow
  • Barclays
  • Boost Capital
  • Spotcap
  • PNC Business Credit
  • Team Factors
  • Close Brothers Invoice Finance
  • Aldermore Invoice Finance
  • Leumi ABL
  • Bibby Financial Services
  • Secure Trust Bank
  • Skipton Business Finance
  • Nucleus Commercial Finance
  • ABN AMRO Commercial Finance
  • Creative Capital
  • Davenham Trade Finance
  • Santander Corporate & Commercial
  • Shawbrook Business Credit
  • Woodsford Tradebridge
  • Regency Factors
  • Davenham Asset Finance
  • Calverton Finance
  • 4Syte
  • Asset Advantage
  • iwoca
  • Innovation Finance
  • MarketFinance
  • InvoCap
  • Partnership Invoice Finance
  • Giant
  • inFund
  • Positive Cashflow Finance
  • Investec
  • GapCap Cashflow Finance
  • Trade Finance Partners
  • Roma Finance
  • Pulse Cashflow Finance
  • IGF Invoice Finance
  • Catalyst Finance
  • Berkeley Trade Finance Ltd
  • Royal Bank of Scotland
  • Merchant Money
  • Gener8 Finance
  • Haydock Finance Ltd
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Authorised and regulated by the Financial Conduct Authority (FCA number 730445)
We are a credit broker and not a lender and offer credit facilities from a panel of lenders

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