Updated: Sep 1, 2020
Are your customers pushing you on terms?
Problem: Your customers are pushing on payment terms.
Solution: Post a documentary letter of credit for your mat purchases. World Forest Group can provide you with up to one-year payment terms thereby satisfying your customer.
Safer transaction and reduced risk by protecting the buyer with two additional layers of oversight.
You may find that offering longer terms to your customer provides you with a competitive advantage in the bid process by combining a superior product with superior payment terms.
How does it work and what is it? (Short summary. More details on request.) An Irrevocable Documentary Letter of Credit is a financial instrument used by banks to guarantee buyers and sellers obligations to each other.
General advantages: Buyer’s and seller’s banks have the relationship rather than buyer and seller. By replacing companies with banks, risk and cost of business is reduced.
Specific advantages for buyer:
Seller is not paid until proper documentation is submitted to buyer’s bank. Documents are generated by the largest and most credit worthy transportation companies.
Buyer’s bank reviews documentation extremely stringently adding a layer of comfort and expertise on top of buyer’s normal back office operations.
Financing: Banks borrow and lend to each other at much lower rates than customers and vendors do.