Sberbank has launched unsecured letters of credit with early payment

Sberbank has launched unsecured letters of credit with early payment


From September 2015 clients of Sberbank became available a new kind of “uncovered” domestic letter of credit — with the early payment.

Many Russian companies are interested in minimizing the risks of trade transactions and concurrent financing. And here can help a new product in the line services to trade Finance and documentary business at Sberbank — “uncovered” domestic letter of credit with early payment.

Financial or commercial Director is likely familiar with the situation when the buyer requests a deferred payment contract, and the seller is unable to provide it because he did not have enough money in circulation. This situation can be difficult for all parties involved, because under the threat can appear and deal and the entire production cycle or supply chain.

Similar difficulties can be overcome if the supplier, for example, takes a loan in the amount of the transaction and returns after payment is received from buyer. But getting a loan isn’t always easy. You can, of course, apply factoring (financing under a concession of the monetary requirement), but it will not work, if both parties to the transaction required solid guarantees: the seller of payment for the product, and the buyer, as the supplies. And the cost of factoring may not always be appropriate.

Letter of trust

To establish a trust relationship between the parties can help the credit, not without reason, whose name comes from the Latin accredo — “trust”. It is the obligation of the Bank to pay the supplier, provided that the last pre-specified documents. The letter of credit as form of payment and financing tool popular with small and medium businesses and largest holdings. And the savings Bank, being one of the market leaders in trade Finance in Russia and CIS countries (1), for many years helps clients to implement and to Finance trade contracts.

Payments on time

Currently domestic letter of credit is one of the most popular products of trade Finance and documentary business at Sberbank. The Bank offers several types of letters of credit, including “uncovered” — when the client does not require the availability of own funds at the opening of the letter of credit: the Bank reserves its resources within the framework of a pre-set risk limit.

From September 2015 clients of Sberbank became available a new kind of “uncovered” domestic letter of credit — with the early payment.

Early payment under a letter of credit is a payment made by the Bank in favor of the beneficiary under the letter of credit with deferred payment provided by the buyer, after acceptance of documents under letter of credit, but before the end of deferment.

Under such letter of credit Sberbank acts as a source of financing for the transaction and allows the seller to receive payment before the end of the deferral provided by the contract.

For the buyer this opens a number of possibilities, the main of which is to obtain a long delay of payment.

For the seller this product is also interesting. He gets the opportunity to minimize the risks of non-payment, to expand the market, offering customers more attractive conditions (the delay), but receiving the funds immediately upon delivery.

The savings Bank trust

Being one of the leaders in the market of payments domestic letters of credit(2), the Sberbank provides the business the ability to obtain financing on attractive terms and to reduce the risks in implementation. According to Sberbank, the credibility of the Bank is confirmed by the growing demand for his services: in 2014 the volume of payments domestic letters of credit reached 170 billion rubles, exceeding by 1.7 times the corresponding figure of 2013. According to statistics, the upward trend has continued in 2015: total amount of payments domestic letters of credit for 8 months of 2015 amounted to approximately 167 billion — 50% higher than last year.

(1) According to the magazine Global Trade Review (2012, 2013 2014), the magazine Global Finance (2014 2015), magazine Trade & forfeiting Review (2013 2014 2015). More detailed information is on the web www.gtreview.com; www.gfmag.com; www.tfreview.com.

(2) According to the research Agency “Expert RA”, conducted according to 2010-2013 More detailed information is available on the website.

“Uncovered” domestic letter of credit with early payment available to Russian legal entities and individual entrepreneurs, acquiring or supplying the goods or performing/providing work/services on the territory of the Russian Federation.

Detailed information about the product, as well as the documents required for its design, You can get on the Bank’s website or from your account Manager. Conditions valid from 16.09.2015 G. Change of terms made by the Bank unilaterally. The information presented in this material is not a public offer.

PJSC Sberbank. General license for banking operations № 1481 from G. 11.08.2015

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