When it comes to gold mining, Ghana is considered to be the hotspot and it’s one of the top gold producing countries. Statistics revealed that in the last year, it produced more than 180 tons of gold. And this attracts more business owners and companies who focused on the Gold trade. As the demand increases, the traders are looking for the option to import gold from Ghana and supply it to the local market which in turn brings more profit. In this video, we have discussed – How to Import Gold Bars from Ghana using SBLC Bank Guarantee.
As similar to Bank Guarantee, SBLC Guarantees or Standby Letters of Credit is the written undertaking that is issued by a bank upon the client’s request. Further, this gives the guarantee by assuring that the bank will meet the payment liabilities of the buyer, in case the buyer fails to make the payment.
SBLC acts as a safety net where the bank assures the payment of the shipped goods. In the event of some unforeseen situation that prevents the buyer from making the scheduled payments to the seller. Further, in this case, the SBLC ensures that the required payments will be made to the seller, upon fulfillment of the required obligations. Also, this includes – the submission of documents listed in the issued Standby Letter of Credit to the buyer’s bank within the specific period.
On the other hand, SBLC also helps the buyer to get out from the worst-case scenario at ease by acting as a Backup Plan for Payment. Also, this Standby LC promotes the seller’s confidence in the trade and enhances the buyer’s credit quality. Further, it acts as a sign of good faith and the ability to make the payment in case of bankruptcy or insufficient cash flows.
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With all these pros, SBLCs are mostly used in global and local trade transactions where there is a lack of trust; especially when two parties involved in the contract don’t know each other.
For instance:
A Buyer from Dubai can import gold from Ghana by using the SBLC guarantee, which states that the buyer will pay within 60 days from the date of shipment. In case, if the seller from Ghana didn’t receive the payment within the credit period, then they can collect the payment for the shipped goods from the buyer’s bank by claiming the issued Standby LC.
This is how the SBLC creates payment assurance between buyer and seller. It also, makes trade transactions easier.
If you are looking to get Standby Letters of Credit for your import-export contract, you can submit your SBLC requirements to us!
With years of experience in issuing SBLCs for our clients globally, we are experts in structuring your deal in an effective way. Further, this helps you to conclude your trade deals in a hassle-free way!
Contact us now with your Standby Letter of Credit requirement!
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