A new service launched in Britain is claiming that the exporting businesses it serves are receiving prompt payment because 95 per cent of the letters of credit (L/Cs) used in the scheme have proved acceptable on first presentation.

The scheme speeds up payment by checking L/Cs, completing documentation and presenting it to the bank.

Document refusals

The Business West Letter of Credit Service is operated by the Bristol Chamber of Commerce & Initiative. It reckons that in Britain, 75 per cent of documents presented to banks for payment on L/C terms are refused for being incomplete or incorrect.

Under its L/C service however, the chamber will check the terms and advise any amendments that the exporter needs to apply for. The chamber will also create all the documents required, liaise with the freight forwarder and submit all the documents to the bank for payment.

Success rates

As a result, the chamber claims that under its scheme it has scored a 95 per cent success rate on first presentation and 100 per cent on second presentation.

Companies of all sizes apparently use the service and it has been adopted by other chambers in the UK, including the Mid Yorkshire Chamber of Commerce, which has joined forces with its counterpart in Bristol to offer the service to its members.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.