Usance Letter of Credit (MT700) — Full Guide & Bank Directory
Everything you need for deferred-payment LCs: documents, banks (complete list), pricing, structures, risks, and compliance. Fully aligned with UCP 600 and SWIFT MT700.
Tenors: 30–360+ days
Sight / Usance / Confirmed / Transferable
Discounting & Acceptance options
Global bank network
Documents
All Banks
Structures
Process
Term Options
Pricing
Risk & Compliance
Case Studies
Trends
Reviews
FAQ
📂 Documents Required for Usance LC Issuance
- Proforma Invoice / Sales Contract
- Company Legal Documents (license, registration, articles)
- Commercial Invoice
- Packing List
- Certificate of Origin
- Inspection Certificate (if required)
- Insurance Certificate (if applicable)
- Bill of Lading / Air Waybill
Additional (if applicable)
- Draft / Bill of Exchange
- Beneficiary Certificate
- Installation / Completion Certificates (projects)
- Technical Specifications
- Environmental Compliance (for green LCs)
Why Usance LC?
- Extended terms & working-capital optimization
- Bank obligation at maturity against compliant docs
- Discounting / post-shipment finance available
- Ideal for manufacturing cycles and projects
🏦 Banks & Financial Institutions Supporting Usance LC — Complete List
Use filters to navigate the full directory. Toggle “unique only” to remove duplicates from multi-source listings.
| Rank | Tier | Bank Name | SWIFT | Country | LC Types | Amount Range | Term | Issuance Fee | Processing Time | Special Features | CTA |
|---|
Usance LC Specialized Structures
| Structure Type | Description | Best For | Key Benefits |
|---|---|---|---|
| Standard Usance | Single payment at fixed future date | General trade, mid-value goods | Simplicity, lower fees |
| Installment Payment | Multiple scheduled payments | Capital equipment, major projects | Aligns cash flow to milestones |
| Transferable Usance | Transfer to supplier/manufacturer | Trading companies | Pass-through tenor to suppliers |
| Confirmed Usance | Confirming bank adds guarantee | Higher-risk countries | Reduces country/bank risk |
| Green / Sustainable | Preferential terms for green projects | Renewables, ESG trade | Better rates, extended terms |
| Supplier Finance Enabled | Integrates with SCF programs | OEMs / distributors | Early payment to suppliers |
| Multi-Drawing | Multiple shipments under one LC | Ongoing supply contracts | Lower admin, consistent terms |
| Project-Linked | Payment tied to project phases | Infrastructure, construction | Predictable capital planning |
Usance LC Issuance Process
- Application: transaction specifics + desired tenor
- KYC & Credit Review
- Term Sheet: payment schedule & clauses
- Draft LC (MT700) review & approval
- Fees/Collateral (as applicable)
- SWIFT Issuance (MT700) to advising bank
- Advising / Confirmation (if required)
- Document Checking; Maturity Management
- Payment at maturity / Discounting if used
Usance LC Term Options
| Term Length | Typical Usage | Industries | Financing Options |
|---|---|---|---|
| 30–90 Days | Standard trade | General merchandise | Discounting, forfaiting |
| 91–180 Days | Manufacturing cycles | Consumer goods, electronics | Discounting, post-shipment |
| 181–270 Days | Seasonal demand | Agriculture, fashion | Inventory financing |
| 271–365 Days | Capital projects | Construction, infra | Project finance |
| 366–730 Days | Complex builds | Heavy machinery | Capital leasing |
Usance LC Pricing Structure
- Issuance Fee: typically 0.25%–2% of LC amount
- Maturity Interest: based on tenor and risk
- Confirmation (documentary credit) fee: 0.25%–1%
- Discounting / Acceptance fees (if used)
- Commitment / Amendment fees as applicable
- Collateral / Security costs (case-by-case)
Risk Mitigation & Compliance
Risks & Mitigation
| Risk | Mitigation | Example |
|---|---|---|
| Credit Risk | Financials & credit reports | Regular credit assessments |
| Country Risk | Confirmed LCs | Secondary bank guarantee |
| Documentary Risk | Strict doc checking | UCP 600 compliance |
| Market Risk | Hedging | FX forwards, swaps |
| Operational | Controls & audits | Dual checks |
| Legal | Local law review | Counsel opinion |
Compliance
- AML & KYC (full onboarding)
- Sanctions Screening (OFAC, UN, EU, etc.)
- UCP 600 & ISBP alignment
- Accurate MT700 field verbiage
- Documentary compliance before maturity
- Reporting per local & international rules
Case Studies
Capital Equipment (365d)
1-year usance matched ramp-up revenue; production +30% without cash strain.
Infrastructure (730d, installments)
Milestone-linked LC synchronized payments with project phases.
Seasonal Agro (270d)
Harvest-aligned maturity smoothed working-capital swings.
Usance LC Trends
- Digital issuance & document checking
- Green financing & ESG terms
- Supply-chain integration (SCF/discounting)
- Heightened regulatory compliance
- Advanced risk mitigation for volatility
Client Reviews (20)
Frequently Asked Questions (15)
Important: All transactions comply with international banking regulations and UCP 600 guidelines. Nothing herein is financial or legal advice; issuance is at the bank’s discretion after full due diligence.