A guide to documentary letters of credit.

Documentary letters of credit are internationally recognised instruments that help ensure the creditworthiness and payment of the overseas parties youre trading with.
How can documentary letters of credit benefit you?
Documentary letters of credit guarantee payment (subject to all its terms and conditions being complied with) when delivering or receiving goods from abroad, allowing you to have greater control over the import and export of your goods or services. Exporting Similarly, when you export you will need to present documents complying with the documentary letter of credit terms and conditions, this will trigger payment to your account. Key features Governed by International Chamber of Commerce rules. No minimum transaction value for importing or exporting. Minimum fee will apply or commission payable for the service. Opportunity to obtain short-term credit. Import documentary letter of credit application subject to status.

Who is eligible to apply for documentary letters of credit?

For importers our service is available to any Lloyds TSB customer and applications are subject to approval from your relationship manager. We can handle export documentary letters of credit for non-customers of Lloyds TSB. Well only handle transactions involving countries authorised for trading that are not restricted under international sanctions and/or Lloyds TSB policy.

How do documentary letters of credit work?

Documentary letters of credit cover the shipment of commercial goods, they can also cover business services. On receipt of an acceptable documentary letter of credit the exporter will ship the goods, then send the trade documents (see below) to the importers bank. Assuming they are in order, the importers bank affects payment, regardless of whether or not the importer is able to or wishes to make payment. Importing If youre an importer you can be confident that we will only make payment from your account when documents that comply with the documentary letter of credit terms and conditions are presented. However, be aware compliant documents do not guarantee the physical quality of the goods despatched.

Key benefits Payment only made when documentary letter of credit terms and conditions have been met. For importers, risk of non-payment transferred from you to Lloyds TSB, as your bank. Opportunity to conduct business in countries where imports can only be made through using documentary letters of credit.

Things to look out for

Documentary letters of credit cannot guarantee the quality, condition or amount of the items youre importing. When exporting goods you must be able to produce evidence for each item requested in the documentary letter of credit. In some instances delays can occur if documents are disputed, this in turn could result in increased costs. Similarly, if the terms and conditions stated in the letter of credit turn out to be more complicated than anticipated you could be charged additional costs.

How to apply for a documentary letter of credit

Importing Contact your relationship manager and make them aware when you expect to receive goods. Agree the documentary letter of credit facility with your relationship manager. Exporting The importers bank will contact us to say that they have issued a documentary letter of credit in your favour, and we will contact you to let you know.

What are the charges for documentary letters of credit?

For our most up-to-date charges please visit www.lloydstsb.com/business and refer to Rates and charges under the Useful Information section.

For more information speak to your relationship manager or telephone the international business team between the hours of 8.30am and 5pm Monday to Friday on 0845 300 0101.

Please contact your branch if youd like this in Braille, large print, or on audio tape.
www.lloydstsb.com/business
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