• Letters of credit

    Import letters of credit

    • Your overseas supplier may require you to provide an irrevocable letter of credit in their favour to secure a trade transaction.
    • We can issue letters of credit to beneficiaries in virtually all countries worldwide and in all freely convertible currencies.
    • Subject to fulfilment of all our requirements, our policy is to ensure the beneficiary's bankers receive our letters of credit within 24 hours of our receipt of your application.
       

    Revolving letters of credit

    • These are useful for buyers and sellers who have a long-standing trade relationship.
    • They involve our conditional undertaking to reinstate a letter of credit either after the occurrence of a specific event or after a specific time period has lapsed.
    • Depending on your needs, we will reinstate these instruments automatically and without any further amendment from you.
    • The number of times this can take place will be agreed upon and specified in the credit documents.
       

    Standby letters of credit

    • Payments under standby letters of credit are generated by the default of the importer under a specific trade contract.
    • Standby letters of credit are irrevocable and payable on demand.
    • Upon your request as an importer, we can provide this form of conditional undertaking to the beneficiary on your behalf.
    • Should you fail to make settlement, we can settle on your behalf. This happens upon presentation of specific documents by the beneficiary, as required under the credit agreement.
       

    Credit refinancing

    • This usually applies to instances where unfavourable market conditions exist on the payment due date and, for one reason or another, you are unable to settle.
    • We can settle import letters of credit on your behalf and refinance you locally up to 180 days after the payment date, depending on your requirements.
    • This arrangement can be applied in various instances and ultimately gives you the flexibility you need to manage your cash flow.

  • Import documentary collections

    • Your overseas suppliers present appropriate documentation to their bankers, which are then forwarded to us to facilitate collection on their behalf.
    • We ensure that you are advised promptly and that their instructions are carried out exactly as per their requirements.
    • Different forms of financing can be arranged based on the presentation of appropriate documentation.

  • Bills of exchange

    • Exporters may require a third party, usually a bank, to guarantee payment of a bill of exchange drawn on an importer under a trade contract.
    • This is known as avalisation and can be provided on behalf of the exporter upon request.
    • By endorsing the bill, the bank commits itself to pay unconditionally if the drawee defaults.
    • An avalised bill substitutes the bank's risk for the importer’s risk, which provides the exporter with the assurance that the payment will be made.
    • This bill can subsequently be discounted or used to negotiate better credit terms, which can enhance the trading relationship with the importer.

  • Letters of credit

    Export letters of credit

    • We can issue letters of credit to beneficiaries in virtually all countries worldwide and in all freely convertible currencies.
    • Subject to fulfilment of all our requirements, our policy is to ensure the beneficiary's bankers receive our letters of credit within 24 hours of receiving an application.
       

    Transferable letters of credit

    • These are letters of credit that can be transferred from the first beneficiary to one or more additional beneficiaries.
    • We can issue and advise on transferable letters of credit on your behalf.
    • Given the risks inherent in these instruments, our trade specialists are available to assist you all the way.

  • Pre- and post-shipment financing

    Pre-shipment financing

    • Provides new sources of working capital at competitive rates, making it ideal if you need to continue or expand production.
    • Can be used as a revolving facility as it is tailored to your production cycle.
    • Allows you to access funding before production and sale of the commodity. 

     

    Post-shipment financing

    • Provides cheaper access to funds after shipment but before maturity.
    • This can be done through negotiation/discounting of shipping documents.
    • Helps you to enhance your cash-flow position to focus on core business.
    • To facilitate this, all the terms and conditions under the export letter of credit need to be fulfilled.

  • Guarantees, bonds and indemnities

    The main types of guarantees and bonds available to you include:

    • Bid bonds
    • Performance guarantees
    • Custom bonds
    • Advance payment guarantees
    • Retention money guarantees
    • Shipping guarantees
    • Maintenance guarantees 
    • You can tender for business that you previously considered out of reach.
    • Improve the terms of your tenders and help you negotiate better terms on contracts. 

  • Invoice and bill discounting

    • Different types of either financial or commercial documents are exchanged during trade transactions
    • These provide evidence of a transaction as well as acknowledgement of debt
    • This specialised form of trade financing is available with or without recourse to your business, depending on the credit assessment of both parties involved in the transaction
    • Enhance your cash flow position
    • Competitively priced
Are you interested in trade finance? 

Fill out the form below and we will contact you to apply




Need more help?

Call us on:
0800 222 333 (Toll Free)
+256 (0) 312 218 348 (Network charges apply)

Email us:
absa.uganda@absa.africa