The advantages of export Documentary collection
Advantages of import Documentary collection
1. The cases, when it is more expedient to use Documentary collection, instead of letter of credit.
- It is expedient to use Documentary letter of credit when the buyer and the seller do not know each other and the seller is not sure of solvency of the buyer, and the buyer is not sure if the supplier would deliver the goods. In case of Documentary collection the seller and the buyer know each other and the seller is sure that the buyer will make the payment against the documents submitted.
2. Is it possible to get funding in case Documentary collection transaction is carried out?
- It is possible to get funding in the process of Documentary collection transaction through discounting the promissory note. Discounting the promissory note on deferred payment, the Bank pays the client/buyer the nominal value of the promissory note discounted in the amount of corresponding discount rate.
By the nature of commercial transaction there are:
You deliver the goods to the buyer, and submit the delivery documents to the Bank with the corresponding instruction to charge the payment for goods from the buyer. The delivery documents may be submitted to the buyer either against the full payment or acceptance of the written document on deferred liability (promissory note).
The exporter delivers the goods to you and instructs your bank to submit delivery documents to Acba bank instructing to charge the payment. The delivery documents may be submitted to you either against the full payment or acceptance of the written document on deferred liability (promissory note) by you. On the conditions agreed preliminarily, the Bank may guarantee the payment of the accepted promissory note by you through aval.
Payment modes for Documentary collection