I’m new to the exporting scene and intend to export a natural resource from southern Africa to western countries (preferably the US). There is a lot of political instability in the country I will be exporting from, but nevertheless I have access to the resources and can get things done. The problem is that I currently have insufficient capital and collateral to secure a loan. I am hoping to get advice on how to obtain letters of credit from a company that uses the resources I have access to; like Philip Morris (or jewelry stores – if they actually do this).
I would also appreciate clarification on one last thing. Upon receiving a letter of credit, will my bank issue me working capital to get things done – or will I only get access to the money after the goods are delivered to the company that issued the letter of credit. Thanks….. (hopefully someone will answer)
A letter of credit is a specific shipping term used to indicate that funds have been established for payment of the shipping services in a bank account from which the shipper will be paid once the shipping is complete. Letters of credit are typically provided by banks (not jewelry stores or cigarette companies).