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Letters of credit

A method of payment under which the bank makes an irrevocable commitment to pay for goods and services to the beneficiary, subject to the documents and deadlines stipulated in the terms of the letter of credit.
A method of payment under which the bank makes an irrevocable commitment to pay for goods and services to the beneficiary, subject to the documents and deadlines stipulated in the terms of the letter of credit.

Benefits

  • A reliable, secure and respected method of payment
  • A high level of security for all parties to the commercial transaction
  • The importer can specify the particular terms of the transaction
  • Assurance of payment against compliant documents presented on time
  • Minimises the commercial risk of unilateral cancellation of the contract
  • The most widely used method of payment in international trade
  • A letter of credit is a written, irrevocable commitment by the Bank to pay a beneficiary upon presentation of specified documents and compliance with all requirements and deadlines set out in the terms of the letter of credit.
  • It gives all parties to the commercial transaction a high level of security and is therefore a preferred method of payment.
  • For business customers importing goods from suppliers abroad or in Bulgaria with whom they have no established trading relationship.
  • For business customers exporting goods abroad or within Bulgaria to new customers trading in risky or unfamiliar markets.

Types

Import letter of credit

The Bank pays the seller only if the documents fully comply with the terms of the letter of credit.
Receipt of the goods within the time limits and on the terms set out in the letter of credit.
The Bank's advice provides assurance and an advantage in negotiations with suppliers.

 Export letter of credit

Guaranteed receipt of payment from the customer upon presentation of compliant documents.
Option to set deadlines in accordance with those specified in the contract.