Guaranteed Letter of Credit

connel42

Hi
We are a small firm suppliying industrial customers.
Some of these have a very poor history of payment wit us.
Due to these times we are lookig at ways of giving credit but that has some guarantees behind it.
I seem to remember from years ago that "Guaranteed Letter of Credit" was used a lot during the last recession.
Does anybody know about them and how or if they are still available?
It would be great to offer 30 days credit knowing you are guaranteed your money at the end.

Any help appreciated

http://www.angloirishbank.ie/Business_Banking/International_Trade/Trade_Products/
They do still exist - the company I work for uses them for international trade with customers where we don't have history or if they are in a dodgy situation.

What sort of amounts are you taking about?
We tend to only use them on bigger deals.

jahalpin

Letters of Credit are normally only used for international trade.

You can get Bank Guarantees when dealing with domestic customers. Basically, this is a guarantee from the customers bank that if the customer defaults, they will pay upto the limit of the guarantee. These guarantees are on-demand, which means that you can call them in at any time and the bank is obliged to pay .

The problem with bank guarantees is that if the customer changes banks etc the guarantee is cancelled