Export letter of credit discount

Increase financial liquidity of your company

About discount

Discount of export letter of credit enables payment under the received documentary letter of credit before its deferred payment term. You may use:

  • Financing on the basis of assessment of the risk of the bank issuing letter of credit (importer's bank) within the limit for this bank – credit capacity of your company is not assessed,
  • financing without the right of recourse to your company,
  • financing without the need to establish collateral by your company,
  • financing without using your credit limits at Bank Millennium,
  • disbursement of funds after obtaining confirmation by the bank issuing letter of credit (importer's bank) that you fulfilled the terms and conditions stipulated in the letter of credit,
  • possibility of additional acceleration of disbursement of funds in case of letter of credit confirmed by Bank Millennium.

Benefits:

  • You will improve financial liquidity of your company (repayment of receivables before the payment term of the letter of credit).
  • You will obtain additional working capital financing without the need to establish collateral.
  • You will simplify your settlements.
  • You will improve the balance sheet of your company.
  • You will mitigate your FX risk and interest rate risk.

FAQ

  • Yes, it is. Discount covers letters of credit with payment term no longer than 360 days from the date of discount.

  • The funds are paid in the amount of the letter of credit, less discount interest for the period from the date of transfer of funds onto the account indicated by the beneficiary to the payment date set forth in the letter of credit. Apart from the amount of the discounted interest, Bank Millennium charges a discount commission in accordance with the Price List for the Corporate Banking Customers.

  • No, we cannot. We discount only letters of credit subject to the Uniform Customs and Practice for Documentary Credits, payable within not more than 360 days, counting from the date of discount, issued in one of the convertible currencies published in the Bank's FX table or in PLN. Furthermore, at the Bank there must be a credit limit available for the bank issuing letter of credit or the bank confirming letter of credit.

  • Credit decision for the Customer (exporter) is not required. The transaction is performed within the limit for the bank issuing letter of credit or the bank confirming letter of credit. The solution offered is highly favourable for your company as the financing is granted without increased credit exposure at the Bank.