If you import from China at any scale, sooner or later the conversation turns to a letter of credit. For many brands it is the least understood part of the whole transaction — a piece of bank paperwork that feels designed to slow things down. Used well, it does the opposite: it lets you buy from a supplier you have never met, with payment that only releases when the agreed conditions are met.
What a letter of credit actually is
A letter of credit (L/C) is a guarantee from your bank that the supplier will be paid — provided they ship on the agreed terms and present the right documents. It moves risk off the two trading parties and onto the banks. The supplier ships with confidence; you pay only against compliant paperwork. Neither side has to fully trust the other.
How an L/C works — in four steps
You open the L/C
Your bank issues the credit in the supplier's favour and guarantees payment under the stated terms.
The supplier ships
Goods leave against the agreed terms, and the supplier gathers the shipping documents.
Documents are presented
The supplier submits the documents and every one is checked against the L/C — we check them too, before they reach the bank.
The bank pays
On fully compliant documents, payment is released. Clean documents in, payment out.
Where L/Cs go wrong: discrepancies
The danger is rarely the structure — it is the documents. A date that does not match, a description a word off, a missing signature: any of these is a discrepancy, and a discrepant presentation can delay payment or trigger fees. Most L/C problems are document problems, and almost all of them are avoidable with one careful review before submission.
Most L/C problems are document problems — and almost all are avoidable.
The right method for each order
An L/C is not always the answer. Part of handling trade finance well is choosing the instrument that fits the order, the relationship and your cash position:
How we handle it
We coordinate the whole process across your brand, your bank and the supplier — structuring the right method per order, preparing compliant documents, and checking every one before it reaches the bank. The goal is simple: trade finance that works for you, not against you, with no surprises between shipment and payment.