How To Get Documentary Letters of Credit Issued for International Trade

Your complete guide to Documentary Letter of Credit (DLC) issuance services: scope, process, timeline, banks, fees, FAQs, and real benefits for cross‑border traders.

1. Service Scope: What We Facilitate

At Financely, we handle the end‑to‑end facilitation of Documentary Letters of Credit (DLCs) for international traders and project sponsors. That means:

• Packaging your sales contract, pro‑forma invoices, and shipping terms into a bank‑ready DLC application.
• Ensuring compliance with ICC UCP 600 and local banking regulations.
• Coordinating with top‑tier issuing and advising banks to secure fast issuance.
• Managing amendments, extensions, confirmations, and document checks until shipping docs are honoured.

2. Why Choose DLCs for Cross‑Border Transactions?

• Eliminate non‑payment risk: The issuing bank guarantees payment once you present conforming documents.
• Improve cash flow: You repay only after physical goods ship and documents clear.
• Global acceptance: DLCs are recognised by suppliers and banks worldwide.
• Flexible structures: Irrevocable, confirmed, red clause, standby—all tailored to your needs.

3. Engagement Process: 5 Simple Steps

1. Engagement Letter: Sign to formalise scope and fees.
2. Document Upload: Securely upload your sales contract, pro‑forma invoice, shipping instructions, and corporate KYC to our platform.
3. Retainer Payment: Pay the non‑refundable retainer (see Fees below) to kick off issuance.
4. Bank Coordination: We select and liaise with a Tier 1 issuing bank (e.g. JPMorgan, CCB) and advising bank.
5. DLC Issuance: Issued within 3–21 working days —timing depends on document completeness and jurisdiction complexity.

4. Who It's For

• Importers and exporters handling cross‑border shipments of goods.
• Trade brokers arranging commodity or physical goods deals.
• Project sponsors requiring payment security on large equipment or infrastructure supply.
• Deal sizes between USD 1 m and USD 100 m.

5. Common DLC Types Explained

• Irrevocable: Cannot be cancelled without agreement from all parties.
• Confirmed: Advising bank adds its guarantee for extra certainty.
• Red Clause: Allows pre‑shipment advances to the seller against warehouse receipts.
• Standby: Backup payment if the underlying contract fails.

6. Parties and Their Roles

• Applicant: Buyer requesting the DLC.
• Beneficiary: Seller/exporter receiving payment.
• Issuing Bank: Issues the DLC on the buyer’s behalf.
• Advising Bank: Notifies the beneficiary and can confirm payment.

7. Timeline: 3–21 Working Days

Stage	Activity	Working Days
Engagement & Onboarding	Sign engagement, upload docs, pay retainer	1–2
Application Preparation	Draft DLC application, review by legal/compliance	2–5
Bank Review & Term Sheet	Issuing bank issues terms; negotiate fees & margins	3–7
Final Agreement & Fees	Sign facility agreement; post margin	2–3
SWIFT Issuance	MT700/710 delivered to advising bank	1–2

*Total: 3–21 days depending on complexity and jurisdiction.*

8. Issuing Banks We Work With

• JPMorgan Chase
• China Construction Bank
• HSBC
• Standard Chartered
• BNP Paribas

9. Pricing Overview

Deal Size	Retainer Fee	Issuance Fee	Margin / Security
USD 1 m – 5 m	USD 5 k	0.75 % p.a.	10 % cash or warehouse receipt
USD 5 m – 25 m	USD 10 k	1.00 % p.a.	15 % margin
USD 25 m – 100 m	USD 20 k	Custom, from 0.85 % p.a.	Negotiable

10. Key Benefits at a Glance

• Secure Payment: Bank‐backed guarantee eliminates counterparty risk.
• Improved Terms: Repayment only upon document presentation.
• Global Reach: Accepted by suppliers across 180+ countries.
• Fast Turnaround: Issue within 3–21 working days.
• Compliance Assurance: Full UCP 600, KYC, and AML support.

11. Frequently Asked Questions

What documents are required?

You need the sales/purchase contract, pro‑forma invoice, shipping instructions, KYC documents for buyer, and collateral proof (cash or warehouse receipt).

Can I choose the advising bank?

Yes. We work with your preferred advising or confirming bank, provided they hold a valid SWIFT BIC.

What if documents don’t match?

Minor mismatches trigger bank queries. We pre‑validate your documents to minimize discrepancies. Major mismatches may require amendment—handled at cost.

How is margin returned?

Upon presentation of conforming docs and payment, the bank releases any cash margin held in escrow.

Do you offer standby letters of credit?

Yes. Our DLC platform also handles SBLC issuance under parallel processes.

Financely Group facilitates Documentary Letter of Credit issuance through regulated banks. We do not take deposits or lend. All services subject to bank credit approval, margin requirements, and compliance with UCP 600, KYC, and AML regulations.