Latvijas pasta banka

Import letter of credit

Import letter of credit is a form of payment, which decreases risks, related to international transactions, due delivery and quality.

Import letter of credit means guarantee of the Bank to pay the seller a settled amount in exchange for related documents, proving shipment of the exported goods to the purchaser (the Customer of the Bank is the purchaser, importer).

Taking into account that import letter of credit is a credit instrument the Bank assesses the customer upon order of which the letter of credit is to be issued. Cash coverage serves as collateral security. In case the customer is unable to provide cash coverage, he may apply for a credit line and offer movable or immovable property as a pledge.

Conditions of the import letter of credit:

  • amount: without limitations if the guarantee of the Bank guarantee has cash coverage; if not – up to EUR 2 000 000;
  • currency: EUR, USD;
  • term: up to 12 months.

Collateral:

  • financial resources/term deposit in the Bank;
  • real estate mortgage up to 70% of the market value of the collateral;
  • commercial pledge of company’s assets up to 70% of the market value of the collateral;
  • other type of collateral acceptable for the Bank.

Conditions of the import letter of credit:

  • duration of active economic activity of the company is at least 6 months;
  • company has positive equity capital;
  • company should operate with gross profit,
  • total liquidity of the company should be equal to or exceed 1.

The procedure of obtaining the import letter of credit:

  • open a current account in LPB;
  • customer has to submit an application for opening a letter of credit and other required documents.

In case the customer regularly uses the import letter of credit as a form of payment, the customer is offered a possibility to sing an agreement on assigning limit of letters of credit, which simplifies opening of preferable letters of credit.

For more detailed information about export letters of credit please contact the Credit department by phone +371 6 777 2 999 or personally at the central office of the Bank.

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