In simple terms, a documentary letter of credit is a legally binding guarantee issued by a bank on behalf of the buyer to pay the seller, provided that the seller meets the conditions outlined in the credit terms and conditions. This guarantee gives the seller assurance that they will receive payment for their goods or services, while the buyer is protected against the risk of not receiving the correct products or delivery specifications.
These letters of credit are commonly used in international trade, where distance and unfamiliarity between buyers and sellers can increase the risk of non-payment or delivery disputes. As such, a documentary letter of credit is a valuable tool for importers and exporters to mitigate financial risks and ensure smoother transactions.
To participate in our services, clients must provide proof of funds and a signed copy of our CIS/KYC (Customer Information Sheet/Know Your Client Form). Our services are focused on instruments with a minimum value of $20,000,000.00 or more.
Utilizing this approach allows buyers to showcase their financial stability, effectively reducing the risk of default and promoting greater trust in the eyes of sellers.
- Participating customers must first schedule a consultation call.
- Upon confirmation of the call, the client will receive the initial paperwork.
• CIS / KYC (Customer information sheet / Know your client).
- Following the consultation, AltFunds Global will offer the following:
• A signed fee agreement for services rendered.
• Mutual non-disclosure, non-circumvent agreement (NDA /NCA)
- The client is then provided with a deed of agreement (DOA) that details the issuer, monetization fee, broker fees, and closing procedures.
- All parties must execute the deed of agreement once it has been signed.
- KYC (Know your Client Form) or CIS (Customer Information Sheet) with a copy of the instrument.
- Mutual Non-Disclosure Agreement and Non-Circumvent Agreement (NDA/NCA).
- Fee agreement for services rendered.
- Deed of agreement.
- A signed and executed contract along with a copy of the Documentary Letter of Credit (DLC) between the buyer and the seller. The contact information of the banking officer who has or will issue the actual documentary letter of credit.
- A demonstrated history of the seller – demonstrating years in business, number of litigations against the seller, and any other relevant information.
Our fees are 2.5% of the face value of the instrument.
Commission to brokers
0.5% of the face value of the instrument.
We can often execute a contract in 7-10 banking days.
- AltFunds Global welcomes and encourages clients to bring their business consultants or legal counsel to all meetings.
- The client is responsible for covering any associated bank fees, legal fees, and tax obligations related to their transaction.
- Please note that banking days and timelines may vary depending on the market and banking conditions.
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