Letters of credit have been around almost as long as commercial trade itself. However, in today’s digital world, letters of credit can be a cumbersome, expensive and time-consuming tool for facilitating a transaction. More importantly, letters of credit place a burden on your buyers at a time when you want a transaction to go as smoothly as possible.
Consider the following issues buyers can have with letters of credit:
Because of these drawbacks, buyers may resist using letters of credit, especially if they are used to dealing with open account terms that allow payment after they have received a shipment.
The Credit Insurance Alternative
Credit insurance can remove these burdens from buyers and simplify transactions. Using credit insurance, you can:
Offer your customers the best payment terms and expand your business using credit insurance.