When is a Letter of Credit Appropriate?
- High-Value or High-Risk Transactions – Ideal for transactions involving expensive or critical goods where compliance, fraud, or delivery risks exist.
- Commodities & Perishable Goods – Ensures buyers receive goods in the agreed condition and quality before payment is released.
- Deals with Unfamiliar Parties – Offers security in transactions between new or untrusted trade partners.
- Complex or Customised Goods – Ensures payment is only made when goods meet the buyer’s specifications.