Deferred Letter of Credit (MT700) — Extended Terms with Bank-Grade Assurance
Get goods now and pay later with a documented bank undertaking under UCP 600. We structure Deferred LCs with tenors from 60 to 730+ days, optional confirmation, and discounting pathways for early exporter payment.
UCP 600
SWIFT MT700
120–730+ day options
Discounting available
All transactions follow ICC rules and are subject to KYC/AML, sanctions screening, and issuing bank policies.
How Does a Deferred LC Work?
1) Issuance of Deferred LC
The buyer’s bank issues an MT700 LC with payment due on a future maturity date (e.g., 60/90/180 days).
2) Goods Shipment
The seller ships the goods and submits the required documents to the nominated/issuing bank.
3) Document Verification
The issuing bank examines documents for strict compliance with LC terms under UCP 600.
4) Deferred Period Begins
The buyer receives goods now and pays later; the bank records the payment obligation.
5) Payment at Maturity
On the due date, the issuing bank releases payment to the seller if documents complied.
Required Documents for Deferred LC Issuance
- Proforma Invoice / Sales Contract — Defines trade terms
- Commercial Invoice — Specifications & transaction value
- Bill of Lading / Airway Bill — Proof of shipment
- Packing List — Quantity, weight, packaging details
- Certificate of Origin — Confirms production location
- Insurance Certificate — For CIF/CIP or high-value cargo
- Inspection Certificate — Quality/quantity per contract
As Applicable
- Installation / Completion Certificates (equipment/projects)
- Technical Specs & Environmental Compliance (ESG/green)
Partner Banks & Financial Institutions for Deferred LC (MT700)
Below is a consolidated table from your tiered list. Terms are indicative and subject to bank approval and compliance.
| Bank Name | SWIFT Code | Country / Region | Advantages | Disadvantages | Issuance Fees | Issuance Time | Min. Transaction | LC Types |
|---|---|---|---|---|---|---|---|---|
| Bank of China | BKCHCNBJ | China / Asia | State network; strong China trade | Less flexible on emerging markets | 0.5%–7% | 2–6 d | $1M | Sight, Deferred, Transferable |
| Standard Chartered (Dubai) | SCBLAEAD | UAE / Global | Cross-border strength; MEA/Asia corridors | Moderate fees | 0.5%–7% | 2–6 d | $500K | Sight, Deferred, Confirmed |
| Access Bank Kenya | ABNGKENA | Kenya / E. Africa | Regional footprint | Limited global network | 0.5%–7% | 2–5 d | $250K | Sight, Deferred |
| Dashen Bank | DASHTEAA | Ethiopia / E. Africa | Preferred for Ethiopia routes | Longer processing | 0.5%–7% | 3–6 d | $250K | Sight, Deferred |
| HSBC Hong Kong | HSBCHKHHHKH | Hong Kong | Premium corridors | Strict verbiage | 1%–4% | 2–5 d | — | Deferred Payment LC |
| Maybank Berhad | MBBESGS2 | Singapore / SE Asia | SE Asia manufacturing | Template-driven | 1%–4% | 2–5 d | — | Deferred Payment LC |
| BNP Paribas | BNPAHKHH | Hong Kong / EU | EU projects; confirmations | Premium pricing on some routes | 1%–4% | 2–5 d | — | Deferred Payment LC |
| Crédit Agricole CIB | AGRIMQMXXXX | France / EU | Infra & energy expertise | Strict compliance | 1%–4% | 2–5 d | — | Deferred Payment LC |
| Alior Bank SA | ALBPPLPWXXX | Poland / EU | EU trade flows | Conservative stance | 1%–4% | 2–6 d | — | Deferred Payment LC |
| Indian Bank | IDIBINBBXXX | India / Asia | India corridors | Fixed templates | 1%–4% | 2–6 d | — | Deferred Payment LC |
| DBS Bank | DHBKHKHH | Hong Kong | Sight & usance capability | Verbiage discipline | 4%–6% | 2–5 d | — | Sight & Deferred |
| HSBC Indonesia | — | Indonesia | Global franchise | — | — | — | — | Deferred Payment LC |
| China Construction Bank (HK) | CCBQHKAX | Hong Kong | Stable processing | Formal amendment path | — | — | — | Deferred Payment LC |
| Banca Nazionale del Lavoro | BNLIITRRALX | Italy / EU | Italian/EU supply chains | Conservative transfer terms | — | — | — | Deferred Payment LC |
| New York Community Bank | NYBCUS33 | USA | US market access | — | — | — | — | Deferred Payment LC |
| Valley National Bank | LUMIUS3N | USA | US regional support | — | — | — | — | Deferred Payment LC |
| Artigiancassa SPA | ARTCITR1XXX | Italy | SME/industrial focus | — | — | — | — | Deferred Payment LC |
| Asia-Invest Bank | — | — | SVG routing | — | — | — | — | Deferred Payment LC |
| Asia-Invest Bank JSC | ASIJRUMMXXX | Russia | — | — | — | — | — | Deferred Payment LC |
| Israel Discount Bank (IDB) | IDBYUS33 | Israel / USA | Dual-market presence | — | — | — | — | Deferred Payment LC |
| UCO Bank | UCBKHKHHXXX | Hong Kong | Competitive mid-market | Conservative clauses | 4%–8% | 2–5 d | — | Deferred Payment LC |
| Dah Sing Bank | DSBAHKHHXXX | Hong Kong | Reliable DLC desk | DLC-only stance (strict) | 5%–6% | 2–5 d | $250K–$1M | Deferred Payment LC |
| CTBC Bank | CTBKHKHHXXX | Hong Kong | Sight & usance options | Strict DLC wording | 4%–6% | 2–5 d | — | Deferred Payment LC |
| Dushanbe City Bank | LCMDTJ22 / LCMDTJ22XXX | Tajikistan | All instruments | Swift-only policy (some routes) | 3%–7% | — | $250K–$50M | Deferred Payment LC |
| Asia Nexus Investment Bank | AINEMY22XXX | Malaysia | All instruments | — | 3%–7% | — | — | Deferred Payment LC |
| Credit Foncier Uganda | CDFOUGKA | Uganda | All instruments | — | 1%–4% | — | — | Deferred Payment LC |
| Credit Foncier Germany | CFEGDE82 / CFEGDE82XXX | Germany | EU structuring; 2× confirmation possible | — | 1%–4% | — | $250K–$50M | Deferred Payment LC |
| Sapelle International Bank | GNERLRLMXXX | Liberia | Wide instrument suite | Swift-only; no email | 3%–7% | — | $250K–$50M | Deferred Payment LC |
| Point Bank (UK) | POITGB21 / POITGB21XXX | United Kingdom | Flexible LC drafting | — | 1%–4% | — | $250K–$50M | Deferred Payment LC |
| Oxford International Bank | — | USA | Instrument via PDF | — | 1%–4% | — | — | Deferred Payment LC |
| Standard Chartered Bank (Indonesia) | — | Indonesia | Global franchise | — | — | — | — | Deferred Payment LC |
| Standard Chartered Bank (Hong Kong) | SCBLHKHHXXX | Hong Kong | Premium corridors | Fixed verbiage | 1%–4% | — | $250K–$1M | Deferred Payment LC |
| ACE Investment Bank | AIBMMYKL / AIBMMYKLXXX | Malaysia | Email & SWIFT delivery | — | 1%–4% | — | $250K–$50M | Deferred Payment LC |
| Standard Commerce Bank | STDMDMDXXX | USA / RD | Multi-format delivery | — | 1%–4% | — | $250K–$50M | Deferred Payment LC |
| Unibanque | UNBQGB22 | United Kingdom | All instruments | — | 1%–4% | — | — | Deferred Payment LC |
| United Bank for Investment | UNTVIQBAXXX | Iraq | All instruments | — | 3%–7% | — | — | Deferred Payment LC |
| United Securities Trust | USTSCH21 | Bahamas | Via MTF | — | — | — | — | Deferred Payment LC |
| UBB Investment Bank | UBBIMY22 / UBBIMY22XXX | Malaysia | Confirmation possible | — | — | — | $250K–$50M | Deferred Payment LC |
| Indian Overseas Bank (Singapore) | IOBAHKHHXXX | Singapore | Sight/Usance | Verbiage strict | 5%–6% | — | $250K–$5M | Sight/Usance/Deferred |
| Asia Pacific Investment Bank | ASPMMYKLXXX / ASPMMYKL | Malaysia | Flexible; confirmation 2× possible | Case-by-case acceptance | 1%–4% | — | $250K–$50M | Deferred Payment LC |
| Amanah Islamic Bank Philippines | AIIPPHM1XXX | Philippines | Islamic structures | LC-only scope | 1%–4% | — | $250K–$50M | Deferred Payment LC |
| Credito Agricole Italiano | CRPPIT2PXXX | Italy | A-rated platform | — | 1%–4% | — | — | Deferred Payment LC |
| Credito Valtellinese SPA | BPCVIT2SXXX | Italy | A-rated platform | — | 1%–4% | — | — | Deferred Payment LC |
| Golden Touch Investment Bank | GTIVMY2LXXX / — | Malaysia / SVG | Offshore flexibility | — | — | — | — | Deferred Payment LC |
| International Commercial Bank (South Sudan) | ICOCSSJBXXX | South Sudan | SVG routing options | — | — | — | — | Deferred Payment LC |
| Citizens Bank Guyana | — | Guyana | Local corridor access | — | — | — | — | Deferred Payment LC |
| Republic Bank (Guyana) | — | Guyana | Regional presence | — | — | — | — | Deferred Payment LC |
| Scotiabank (Guyana) | — | Guyana | Global brand | — | — | — | — | Deferred Payment LC |
| Standard Bank (Comoros) | — | Comoros | Regional coverage | — | — | — | — | Deferred Payment LC |
| Slovenská Sporiteľňa | — | Slovakia | EU market | — | — | — | — | Deferred Payment LC |
| Exim Bank Tanzania | EXTNTZTZ | Tanzania / Africa | SVG/EEB routes | Slower processing | — | — | $250K–$100M | Deferred Payment LC |
| Mauritius Commercial Bank | MCBLMUMU | Mauritius | Offshore expertise | — | — | — | $250K–$100M | Deferred Payment LC |
| ABC Banking Corporation | ABCKMUMU | Mauritius | EEB routes | Niche market | — | — | $250K–$100M | Deferred Payment LC |
| Maubank Ltd | MPCBMUMU | Mauritius | Flexible | — | — | — | $250K–$100M | Deferred Payment LC |
| Aktif Bank | CAYTTRIS | Turkey | Case-by-case terms | — | — | — | $250K–$100M | Deferred Payment LC |
| United Bank for Africa (Mozambique) | UNAFMZMA | Mozambique | Pan-African network | — | — | — | $250K–$100M | Deferred Payment LC |
| Euro Exim Bank | EULULCL1XXX | St. Lucia | No cash/deposit required | Higher fees | 4%–9% | — | $100K–$100M | Deferred Payment LC |
| Indian Overseas Bank (Hong Kong) | IOBAHKHHXXX | Hong Kong | DLC desk | Strict verbiage | 5%–6% | — | — | DLC / Deferred |
| Tabarak Investment Capital | TIBIAEADXXX | Dubai | Email & SWIFT delivery | — | 0.25%–2% | — | — | Deferred Payment LC |
| Digital Commercial Bank | — | Dubai | Large-ticket focus | SBLC > $25B scope | 1%–4% | — | — | Deferred Payment LC |
| Merchant International Bank | MCGONZ21 / MCGPUS51 | UK / USA | Paper instruments | — | 1%–4% | — | — | Deferred Payment LC |
| PG Asia Investment Bank | AINEMY22 | Malaysia | Agile processing | — | — | — | — | Deferred Payment LC |
| Soleil Bank | SCGRUS33 | USA | SVG routing | — | — | — | — | Deferred Payment LC |
| IMB Ltd | — | St. Kitts & Nevis | Offshore routes | — | — | — | — | Deferred Payment LC |
| Banco Micro Capital | — | Tanzania / Global | YGC profile | — | — | — | — | Deferred Payment LC |
| Union Banco Credit | — | Zambia / Global | YGC profile | — | — | — | — | Deferred Payment LC |
| UOB Global Capital | — | UK / Global | YGC profile | — | — | — | — | Deferred Payment LC |
| Acumen Bank | — | Comoros | YGC profile | — | — | — | — | Deferred Payment LC |
| United Trust Bank | — | UK / UAE | YGC profile | — | — | — | — | Deferred Payment LC |
Why Use a Deferred LC?
| 🔒 Feature | ✅ Benefit |
|---|---|
| Deferred Payment | Flexible buyer terms; predictable seller cash-in |
| Immediate Goods Receipt | Ship now; pay on agreed future date |
| Direct Bank Obligation | Bank pays at maturity without drafts/acceptances |
| Working Capital Optimization | Preserves buyer liquidity; export discounting available |
| UCP 600 Compliance | Global legal/documentary framework |
Specialized Deferred LC Structures
| Structure Type | Description | Best For | Key Benefits |
|---|---|---|---|
| Standard Deferred Payment | Single payment at a fixed date | General trade | Simplicity, lower fees |
| Installment Payment | Multiple scheduled payments | Capital equipment, projects | Aligns with milestones |
| Transferable Deferred | Transfer rights to suppliers | Traders, intermediaries | Pass-through terms to vendors |
| Confirmed Deferred | Secondary bank guarantee | Higher-risk countries | Reduces issuer/country risk |
| Green / Sustainable | Preferential ESG terms | Renewables, sustainable trade | Extended tenor; pricing benefits |
| Supplier-Finance Enabled | Linked to SCF programs | Large supplier bases | Early payment to suppliers |
| Multi-Drawing | Multiple shipments under one LC | Ongoing supply | Consistency; less paperwork |
| Project-Linked | Terms tied to phases | Infrastructure & construction | Cashflow matched to delivery |
Deferred LC Issuance Process
- Comprehensive Application: Submit transaction and deferred-pay specifics.
- Enhanced Due Diligence: Credit assessment & sanctions screening.
- Term Sheet Negotiation: Payment schedule, conditions, confirmations.
- Structured LC Draft: Review and approve full LC text.
- Fees & Collateral: Arrange issuance/confirmation and any security.
- SWIFT Issuance: MT700 transmitted with deferred terms.
- Advising / Confirmation: Receiving bank advises; may confirm.
- Maturity Management: Track due dates & obligations.
- Documentary Compliance: UCP 600 examination; resolve discrepancies.
- Scheduled Payment Execution: Bank pays at maturity; discounting optional.
Deferred LC Term Options
| Term Length | Typical Usage | Industries | Financing Options |
|---|---|---|---|
| 120–180 Days | Extended manufacturing cycles | Consumer goods, electronics | Discounting, forfaiting |
| 181–270 Days | Seasonal demand cycles | Agriculture, fashion | Inventory / seasonal loans |
| 271–365 Days | Significant capital projects | Construction, infrastructure | Project finance, bridge loans |
| 366–730 Days | Complex implementation | Heavy machinery, plants | Term loans, capital leasing |
| 731 Days+ | Long-term development | Public works, energy | Project bonds, syndicated loans |
Deferred LC Pricing Structure
- Issuance Fee: ~0.25%–2.0% of LC amount (admin costs)
- Maturity Interest: Based on tenor and risk
- Confirmation Fee: ~0.25%–1.0% if a second bank confirms
- Discounting Fees: If exporter elects early payment
- Commitment Fees: On undrawn amounts for long tenors
- Amendment Fees: For changes to original LC terms
- Collateral Costs: If security is required by issuer
Risk Mitigation & Compliance
| Risk Type | Mitigation Strategy | Example |
|---|---|---|
| Credit Risk | Obtain financials & credit reports | Regular credit assessments |
| Country Risk | Use confirmed LCs | Secondary bank guarantee |
| Documentary Risk | Thorough document checking | Strict UCP 600 compliance |
| Market Risk | Hedge FX/interest rates | Forwards, swaps |
| Operational Risk | Robust internal controls | Audits, staff training |
| Legal Risk | Local law and sanctions adherence | Legal reviews |
- AML / KYC and Sanctions screening
- Environmental / ESG compliance for green structures
- Regulatory reporting per jurisdiction
Case Studies
Capital Equipment Purchase — 365 days
A manufacturer upgraded machinery under a 365-day Deferred LC, matching payments to revenue. Outcome: +30% capacity without cash strain.
Infrastructure Project — 730 days
A construction firm aligned installments to milestones via a 730-day LC. Outcome: on-time completion and smooth cashflow.
Seasonal Agriculture — 270 days
An agri exporter financed crop cycles and paid post-harvest. Outcome: timely payouts, higher yields, and stable working capital.
Deferred LC Trends
- Digital Transformation: Electronic document presentation and status tracking
- Green Financing: Increasing preference for sustainable projects
- Supply Chain Integration: Linking LCs with SCF/early payment programs
- Regulatory Compliance: Heightened focus on sanctions and ESG
- Advanced Risk Management: Wider hedging and pricing transparency
Deferred LC vs Other Trade Finance Instruments
| Instrument | Trigger | Best For | Seller Protection |
|---|---|---|---|
| Deferred LC | Compliant documents | Flexible, delayed payments | 🔒🔒🔒🔒 |
| Sight LC | Compliant docs (immediate pay) | Perishables / urgent trades | 🔒🔒🔒🔒🔒 |
| SBLC | Buyer default / non-payment | Backup for high-risk buyers | 🔒🔒 |
| Bank Guarantee | Contract breach | Projects, leasing, tenders | 🔒🔒🔒 |
Client voice: “We structured a €2.5M Deferred LC with 90-day terms. Smooth, transparent, and efficient.” — H. Lamine (UAE)
Client Reviews (15)
Laura M. — EuroTextiles
★★★★★
90-day terms gave us breathing room while demand ramped up.
Yusuf K. — Bosporus Trade
★★★★★
Deferred LC + discounting = perfect cashflow bridge for imports.
Priya N. — AgriLink Exports
★★★★☆
Thorough document checklist; once set, execution was fast.
Daniel H. — Andean Foods
★★★★★
180-day LC aligned with retail sell-through. Game-changer.
Amina S. — Sahara Agro
★★★★★
Bank choice perfectly matched our corridor; adding confirmation helped.
George P. — Helios Infra
★★★★★
Installments mirrored milestones. Zero friction at maturity.
Elodie M. — MedEuropa
★★★★★
UCP-compliant wording passed bank checks at first submission.
Henry T. — Nordic Rail
★★★★★
271-day option matched our installation timeline perfectly.
Omar H. — Oasis Group
★★★★★
Clear roles among advising/confirming banks avoided delays.
Valeria C. — LatAm Chem
★★★★☆
Extra sanctions check added a day, but everything settled as drafted.
Hassan A. — Gulf EPC
★★★★★
730-day project-linked schedule made the contract bankable.
Sophia L. — Pacific Commodities
★★★★★
Discounting gave us early cash without renegotiating pricing.
Ravi S. — Indus Components
★★★★★
Draft review was transparent and fast. Highly recommended.
Ivy W. — Skyline Estates
★★★★★
Better supplier terms thanks to the bank obligation.
Jun Park — Apex Components
★★★★★
Best instrument we used this year for long-lead imports.
Frequently Asked Questions (15)
1) What is a Deferred LC?
A documentary credit where the issuing bank undertakes to pay at a future maturity date once compliant documents are presented and accepted under UCP 600.
2) How is it different from a Usance LC?
Classic usance often involves drafts/acceptances; a Deferred LC is a direct bank promise to pay at maturity without negotiable instruments.
3) What tenors are typical?
60/90/120/180/270/365 days are common; project structures may extend to 730+ days subject to approval.
4) Can it be confirmed?
Yes. A second bank can add its guarantee to mitigate issuer/country risk.
5) Is transferability possible?
Yes, if designated “transferable” at issuance. We can embed transfer clauses for multi-supplier chains.
6) Who pays the fees?
Charges are set in field 71B of the LC. We align cost sharing with your commercial terms.
7) Can exporters get early payment?
Yes. Discounting with the advising/confirming bank may be available, subject to pricing and approval.
8) What documents are required?
Contract/PI, commercial invoice, B/L or AWB, packing list, COO, insurance, and any inspections specified in the LC.
9) How long does issuance take?
With a complete file: draft within 24–72h; issuance typically 2–6 business days.
10) Are partial shipments allowed?
If the LC permits partials, yes. We can draft accordingly (fields 43P/43T).
11) How are discrepancies handled?
Banks notify discrepancies; applicant may waive or beneficiary may amend/replace docs to cure.
12) Can a Deferred LC be denominated in different currencies?
Yes, most major currencies are supported; FX risk can be hedged via forwards/swaps.
13) Can services be covered?
Primarily for goods. Certain service contracts work if objective documentary evidence is defined.
14) How does Deferred LC compare to supplier credit?
Supplier credit relies on seller balance sheet; a Deferred LC replaces that with a bank’s documented obligation to pay.
15) Can it combine with trade credit insurance?
Yes. Insurance may cover residual risks (e.g., confirmation bank risk) and can improve discounting rates.
Ready to structure your Deferred LC?
Email the Structuring Desk
Send your contract, shipment plan, preferred tenor(s), and corridor.
Start by EmailDocument Checklist
- Contract & Proforma
- Draft LC terms & conditions
- KYC/AML package
Secure Messaging
We can open a data room for draft review and KYC coordination.
WhatsApp the TeamWe reserve the right to decline engagements where compliance risks are present. All terms subject to final bank approval.