Export Letter of Credit is an instrument issued by the bank in favor of the supplier or the exporter on behalf the buyer or the importer, promising to pay the beneficiary after submitting the required documents and meeting the Letter of Credit terms as per underlying contract.
Payment under the Letter of Credit may be made available to the beneficiary by Sight payment, deferred payment, acceptance (of drafts of documents) or negotiation*
Possibility of prepaying you export bills (post acceptance or otherwise) at competitive rates of interest to speed up your cash flow
Adding independent confirmation to the Letter of Credit, so that in case any non-payment risk from the issuing bank of country of import you can get your export proceeds from the confirming bank.
Negotiation is the purchase/prepayment by the nominated bank of drafts (drawn under the letter of credit on a bank other than the nominated bank) and/or documents under a complying presentation, by advancing or agreeing to advance funds to the beneficiary on or before the banking day on which reimbursement is due to the nominated bank from the LC issuing bank.