Letter of creditAfter the buyer and seller sign the contract is completed, they must proceed to the payment. Typically, the buyer and the seller do not know each other very well, they need to be cautious in making the sale. The buyer wants to receive goods before paying out when the seller wants to receive money before delivery. To ensure safety for both parties, they use letters of credit Letter of credit is a tool of the Bank can guarantee to the seller receives money when they give enough paperwork to prove his bank agreed to the transfer. On the other hand letters of credit guarantee for buyers need not pay in advance when the seller to move his goods.
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