Managing Risk

Letters of credit

Why use a letter of credit?

Letters of credit are among the most secure methods of settlement, and are internationally recognised. Import and export letters of credit are legally binding. They cannot be cancelled unless all parties agree.

Import letters of credit reassure your overseas suppliers about receiving payment and they assure you about the receipt of your goods from overseas before you pay. We commit to payment on your behalf via a pre-agreed credit facility. But we only pay once documentation submitted by the exporter complies with the terms of the import letter of credit. This gives you confidence that the goods you buy will be as ordered, and they will be delivered at the agreed time and place.

Export letters of credit are beneficial if you are selling and you want to ensure payment for your goods - especially if you are dealing with a new market, country or trading partner. Export letters of credit are payment commitments given by your buyer’s bank providing that you fulfil the terms and provide the documentation as required within the letter of credit.

Where you require additional comfort – maybe when exporting to developing countries – we may consider ‘confirming’ the letter of credit. This means that, subject to the terms of the letter of credit being met and all documents being in order, we'll guarantee payment in the event that the buyer’s bank is unable to.

Here are the benefits

Expand into new markets

Export letters of credit could enable you to trade in markets where other types of payment could be risky.

Payment security

Ship goods in the knowledge that, providing your documentation is in order, you'll receive immediate payment or an agreement to pay in the future from us or the buyer’s bank.

Easy document management

Use MaxTrad to raise and manage your letter of credit business, allowing you to check the status of transactions through a secure online platform.

Secure finance

Letters of credit could increase your chances of securing pre-shipping finance.

Let's get started

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Ready to apply

If you’re a UK customer, simply click the button to start your application online. Alternatively, you can always talk to your relationship manager or give us a ring on the number below.

Application subject to customer credit line facilities. Fees and charges will apply for these services.

Contact us on: 0345 050 0693

Text Relay: 18001 0345 303 0077

Lines are open 9.00am-5.00pm, Monday to Friday (except public holidays).

Calls may be recorded and call charges from residential, business and mobiles vary, depending on your telephone operator’s tariff.

If you’re a customer registered abroad, or you’d prefer to apply offline, you can download an application form below.

Are you a new customer interested in Letters of Credit?

Please call our trade finance specialists who can talk you through solutions tailored specifically for you.

Contact us on: 0345 050 0693

Text Relay: 18001 0345 303 0077

Lines are open 9.00am-5.00pm, Monday to Friday (except public holidays).

Calls may be recorded and call charges from residential, business and mobiles vary, depending on your telephone operator’s tariff.

Thanks, now tell us what sort of customer you are

Ready to apply

If you’re a UK customer, simply click the button to start your application online. Alternatively, you can always talk to your relationship manager or give us a ring on the number below.

Application subject to customer credit line facilities. Fees and charges will apply for these services.

Contact us on: 0345 050 0695

Text Relay: 18001 0345 303 0077

Lines are open 9.00am-5.00pm, Monday to Friday (except public holidays).

Calls may be recorded and call charges from residential, business and mobiles vary, depending on your telephone operator’s tariff.

If you’re a customer registered abroad, or you’d prefer to apply offline, you can download an application form below.

Are you a new customer interested in Letters of Credit?

Please call our trade finance specialists who can talk you through solutions tailored specifically for you.

Contact us on: 0345 050 0695

Text Relay: 18001 0345 303 0077

Lines are open 9.00am-5.00pm, Monday to Friday (except public holidays).

Calls may be recorded and call charges from residential, business and mobiles vary, depending on your telephone operator’s tariff.

Additional resources

Something else we can help you with?