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Letters of Credit Payment Types

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Letters of Credit Payment Types

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    1. Letters of Credit Payment Types Sight Deferred Payment Acceptance Transferable

    2. 1. Buyer & Seller Agree to Transaction Terms 2. Buyer submits application to Issuing Bank 3. Issuing Bank A. Reviews application & buyers credit availability B. Issues LC C. Sends LC to advising bank or beneficiary 4. Advising bank reviews LC and forwards to beneficiary 5. Beneficiary reviews LC, manufactures & ships product 6. Documents are completed & gathered by beneficiary & sent to Advising Bank 7. Advising Bank negotiates the documents and if clean forwards documents to issuing bank A. If discrepancies are found, beneficiary is notified before documents are sent to issuing bank. 8. Issuing Bank negotiates documents & advises applicant that documents will be accepted and funds will be transferred per the LC. 9. Funds are transferred from the Issuing bank to Advising bank. 10. Funds are received by advising bank & beneficiary. 1. Buyer & Seller Agree to Transaction Terms 2. Buyer submits application to Issuing Bank 3. Issuing Bank A. Reviews application & buyers credit availability B. Issues LC C. Sends LC to advising bank or beneficiary 4. Advising bank reviews LC and forwards to beneficiary 5. Beneficiary reviews LC, manufactures & ships product 6. Documents are completed & gathered by beneficiary & sent to Advising Bank 7. Advising Bank negotiates the documents and if clean forwards documents to issuing bank A. If discrepancies are found, beneficiary is notified before documents are sent to issuing bank. 8. Issuing Bank negotiates documents & advises applicant that documents will be accepted and funds will be transferred per the LC. 9. Funds are transferred from the Issuing bank to Advising bank. 10. Funds are received by advising bank & beneficiary.

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