L/C Upas was born as an optimal solution, helping importers solve the problem of safe and effective payment, while optimizing cash flow and improving competitiveness. So, what is L/C Upas? Let's find out more in the detailed article below of SeABank.
What is L/C Upas?
L/C Upas (Usance Payable At Sight Letter of Credit) is a form of deferred payment letter of credit issued by SeABank in which the Exporter can receive money immediately or at a certain time in the future when presenting a suitable set of documents. Currently, this is a form of payment that satisfies the needs of the buyer and seller, allowing import enterprises to pay the exporter immediately or at a time agreed upon by both parties, while still enjoying the deferred payment period.
L/C Upas is a deferred payment letter of credit but can be paid immediately.
Features of L/C Upas
To better understand Upas L/C, you can refer to some more information about the characteristics of this payment method as follows:
- Upas L/C is a type of deferred payment L/C issued by the bank at the request of the buyer (importer).
- The seller (beneficiary - exporter) has the right to choose to present the documents to receive payment immediately or at a certain time in the future, before the due date from the discounting bank/reimbursing bank.
- Applicable to both import L/C and domestic L/C.
- Simple procedures and flexible funding time according to customer needs.
- Ensure safety for both buyers and sellers.
- Customers are financed to buy goods on credit for a certain period of time but still ensure timely payment as required by the seller.
- More competitive costs compared to borrowing capital to pay L/C, helping businesses optimize the profits of their business plans..
- In UPAS L/C transaction, in addition to the issuing bank and the exporter's bank, the participation of the sponsoring bank will be required..
Upas L/C is a combination of the advantages of sight L/C and deferred payment L/C.
Benefits of L/C Upas
Using L/C Upas in international transactions can bring benefits to both Exporters, Importers and banks. Specifically, the benefits for each party participating in the L/C Upas method are as follows:
Benefits for Exporters
For Exporters, Upas L/C brings the following benefits:
- Get paid now: Exporters can receive payment right away after presenting correct and complete documents as prescribed in the L/C..
- Risk Mitigation: Upas L/C is guaranteed by the bank, so the exporter will be assured of receiving full and timely payment.
- Increase competitiveness: Providing flexible payment methods to importers will help exporters increase their competitiveness in the international market.
Benefits for Importers
When Importers use the Upas L/C payment method, they will also receive the following benefits:
- Increase payment term: L/C Upas allows the importer to pay for the goods after a certain period of time from the date of presentation of the documents. This helps reduce financial pressure and increase the ability to rotate capital for the business.
- Risk Mitigation: Upas L/C is guaranteed by the bank, so the importer will be guaranteed to receive goods of the correct quality and quantity according to the contract.
- Increase price negotiation power: Thanks to flexible payment terms, importers can negotiate for better prices from suppliers.
- Although it is a form of bank financing, UPAS L/C service has a more competitive fee compared to the interest rate when borrowing capital. Thereby, businesses can significantly reduce financial costs.
- Enhance the importer's reputation by ensuring payment by not only the issuing bank but also the sponsoring bank.
Using Upas L/C can help Importers increase payment terms
Benefits for banks
For banks participating in Upas L/C, they can diversify products and services, expand market share and enhance domestic and international payment reputation.This helps attract more customers and contributes to sustainable development in the future.
Conditions and procedures for registering L/C Upas
Depending on each bank, the conditions and procedures for registering to issue Upas L/C will be different. However, you can refer to the conditions, process and procedures for registering L/C Upas at Southeast Asia Commercial Joint Stock Bank - SeABank, is being evaluated by many customers as one of the top credit institutions in issuing UPAS L/C quickly, with simple and flexible documents.
Accordingly, when registering for L/C Upas at SeABank, you need to meet the following conditions and procedures:
Conditions for registering L/C Upas
- Corporate customers have import activities and meet the conditions prescribed by SeABank.
- Imported goods are not on the list of prohibited/suspended/restricted goods.
Documents to register L/C Upas
- Open RequestL/CUPAS.
- Foreign trade contract.
- Transport insurance documents (if any).
- Import license (if the imported item is on the management list, an Import License from the Ministry of Trade is required).
Procedures for opening L/C Upas
- Step 1: The business prepares documents as required by the bank.
- Step 2: The enterprise submits the application to the Upas L/C issuing bank.
- Step 3: The bank will conduct an appraisal of the application.
- Step 4: If the application is accepted, the enterprise will pay the necessary fees and deposits. The bank will then issue the Upas L/C.
Conditions and procedures for registering L/C at SeABank are simplified for customers.
Conclude
L/C Upas has been affirming its position as the optimal and safe international payment solution for businesses in the era of economic globalization. With its outstanding advantages, L/C Upas helps businesses optimize cash flow, minimize risks, improve competitiveness and expand import and export markets.
If your business is in need of registering for L/C Upas, please refer to SeABank's services immediately. SeABank is proud to be one of the leading banks in Vietnam providing L/C Upas services with many attractive benefits such as competitive fees, long funding periods, and a streamlined and simplified L/C Upas registration process, creating convenience for customers.
To learn more about SeABank's UPAS L/C service, please visit the website or contact Hotline 1900.555.587 (Customer Service) or 1900.599.952 (Business Service).
