Usance Letter of Credit (MT700) – Flexible Payment, Secured Trade
Ensure Secure & Reliable Global Trade Payments | 100+ LC-Secured Projects | Global SWIFT Bank Network Connected
⚠️ Have You Lost a Deal Due to Lack of Payment Guarantees?
Recently, an exporter lost $500,000 because no LC was in place. At NNRV, we structured a tailored LC in 48h, saving their next $3M deal. Don’t trade on blind trust. Secure every deal with confidence.
🧠 « Without NNRV’s LC, I would’ve lost my biggest contract. Their team is responsive and knows the game. »
What is a Usance Letter of Credit (LC)?
A Usance Letter of Credit (LC), also known as a Deferred Payment LC, allows the buyer to make payment at a future date—typically between 30 to 180 days after shipment. It enables the buyer to receive goods immediately while deferring payment, thereby supporting better cash flow and enhancing trade relationships.
At NNRV Trade Partners, we facilitate the issuance of Usance LCs (MT700) through our trusted partner banks, offering flexible tenors and seamless international trade processing.
🧠 “NNRV allowed us to import large volumes with deferred payments, giving us time to sell before paying.” — Dany K., Retail Distributor
Key Features of a Usance LC
✔ Deferred Payment Terms – Enables buyers to receive goods and make payment later.
✔ Secure Trade Transactions – Reduces risk by using bank-issued credit guarantees.
✔ Customizable Credit Periods – Typically 30, 60, 90, or 180 days, based on agreement.
✔ Improves Cash Flow – Allows buyers to sell goods before making payment.
✔ Governed by UCP 600 – Ensures compliance with international trade finance regulations.
Ideal for:
• Importers with tight cash flow
• Large volume or seasonal purchases
• Trade between emerging and mature markets
How Does a Usance Letter of Credit Work : Simple, Flexible, Reliable ?
- LC Issuance: The buyer’s bank issues a Usance LC (MT700) in favor of the seller with deferred payment terms.
- Issuing Bank Sends LC – The Usance LC is transmitted via SWIFT MT700 to the seller’s bank
- Goods Shipment: The seller ships the goods and submits the required documents to the bank.
- Document Verification: The issuing bank checks the documents for compliance with the LC terms.
- Payment Schedule Initiation: Once documents are approved, the buyer is granted a payment deferral as per the agreed timeline (e.g., 90 days from the Bill of Lading date).
- Maturity Payment: The buyer completes the payment to the seller or the seller’s bank on the due date.
Why Use a Usance LC for International Trade?
🔹 Improved Cash Flow: Buyers can sell goods before the payment due date.
🔹 Stronger Supplier Relationships: Sellers gain trust by securing guaranteed future payments.
🔹 Better Trade Terms: Enables importers to negotiate better pricing and bulk orders.
🔹 Reduces Financial Pressure: Avoids the need for immediate upfront payments.
🔹 Bank-Assured Protection: Reduces counterparty risk for both buyers and sellers.
📂Documents Required for Usance LC Issuance
To facilitate the issuance of a Usance LC, we require:
✔ Proforma Invoice / Sales Contract – Defines the trade agreement.
✔Company Legal Documents – Business license, registration, articles
✔ Bill of Lading / Airway Bill – Confirms the shipment of goods.
✔ Commercial Invoice – Specifies the product details and transaction value.
✔ Insurance Certificate – If required under trade terms.
✔ Packing List – Outlines the packaging and content details.
✔ Certificate of Origin – Verifies the country of production.
✔ Inspection Certificate ( If required ) – Ensures quality compliance.
✔Insurance Certificate – (If applicable) – Risk protection
Banks and Financial Institutions Supporting Usance LC Issuance
We partner with leading global banks to offer reliable Usance LC issuance and deferred payment solutions:
Specialized Usance LC Issuing Banks for Extended Payment Terms
for Deferred Payment Transactions
| Rank | Bank Name | SWIFT Code | Country | LC Types | Amount Range | Term | Issuance Fee | Processing Time | Special Features |
|---|---|---|---|---|---|---|---|---|---|
| TIER 1: PREMIUM BANKS (AAA/AA RATED) | |||||||||
| 1 | Citibank Hong Kong | CITIHKHHXXX | Hong Kong | Usance LC, Confirmed Usance LC | $2M – $100M | 60-270 days | 1.2% – 4.0% | 5-7 business days | Global network, strong in commodity finance, 60/90/120/180-day terms available |
| 2 | HSBC Commercial | HSBCHKHHHKH | Hong Kong | Usance LC, Transferable Usance LC | $2M – $75M | 90-360 days | 1.2% – 4.0% | 5-8 business days | Extensive correspondent network, specialized in manufacturing financing |
| 3 | Bank of China | BKCHCNBJ | China | Usance LC, Confirmed Usance LC | $2M – $80M | 90-360 days | 1.2% – 4.0% | 6-9 business days | Chinese backing, excellent for Asia-Pacific trade, competitive rates for large values |
| 4 | Deutsche Bank | DEUTDEHHXXX | Germany | Usance LC, Revolving Usance LC | $2M – $75M | 60-360 days | 1.2% – 4.0% | 5-8 business days | European credibility, preferred for EU-Asia trade corridors |
| 5 | Bank of Communications | COMMHKHHXXX | Hong Kong | Usance LC with acceptance | $2M – $50M | 90-360 days | 1.2% – 4.0% | 6-9 business days | Chinese state backing, excellent for manufacturing financing |
| TIER 2: STRONG COMMERCIAL BANKS (A/BBB RATED) | |||||||||
| 6 | Bank of East Asia | BEASHKHHXXX | Hong Kong | Usance LC, Transferable Usance LC | $1M – $30M | 90-270 days | 1.8% – 4.5% | 5-8 business days | Regional specialist, strong in garment/textile financing |
| 7 | Hang Seng Bank | HASEHKHHXXX | Hong Kong | Usance LC with Red Clause | $1M – $25M | 60-270 days | 1.8% – 4.5% | 4-7 business days | HSBC subsidiary, competitive rates, strong in consumer goods |
| 8 | Industrial Bank of Korea | IBKOKRSE | South Korea | Usance LC, Back-to-Back Usance LC | $1M – $35M | 90-270 days | 1.8% – 4.5% | 5-8 business days | Korean manufacturing specialist, preferred for electronics/automotive |
| 9 | Habib Bank AG Zurich | HBZUHKHHXXX | Hong Kong | Usance LC, Confirmed Usance LC | $1M – $20M | 90-270 days | 1.8% – 4.5% | 6-9 business days | Swiss backing, strong in Middle East/South Asia trade routes |
| 10 | Mizuho Bank | MHCBJPJTXXX | Japan | Usance LC, Transferable Usance LC | $1M – $40M | 90-360 days | 1.8% – 4.5% | 5-8 business days | Japanese backed, excellent for automotive/industrial financing |
| TIER 3: SPECIALIZED & FLEXIBLE ISSUERS | |||||||||
| 11 | LBBW Bank | SOLADEST | Germany | Usance LC with discounting option | $500K – $15M | 90-270 days | 2.2% – 5.0% | 4-7 business days | German Landesbank, SME specialization, excellent for machinery financing |
| 12 | Atlantic Commercial Bank | ATCOUSUSXXX | USA | Usance LC via SWIFT MT700 | $500K – $20M | 60-270 days | 2.2% – 5.0% | 4-6 business days | US regulatory framework, specialized in agricultural/commodity financing |
| 13 | First Gulf Bank | FGBMAEAA | UAE | Usance LC with post-financing | $500K – $15M | 90-360 days | 2.2% – 5.0% | 5-8 business days | Middle East specialist, excellent for oil/gas/commodity |
| Rank | Bank Name | SWIFT Code | Country | LC Types | Amount Range | Term | Issuance Fee | Processing Time | Special Features |
|---|---|---|---|---|---|---|---|---|---|
| TIER 1: PREMIUM BANKS (AAA/AA RATED) | |||||||||
1
| HSBC Hong Kong | HSBCHKHHHKH | Hong Kong | Usance LC | – | 30-180 days | 1% – 4% | – | Verbiage fixe, sight only |
| 2 | Maybank Berhad | MBBESGS2 | Singapore | Usance LC | – | 30-180 days | 1% – 4% | – | Verbiage fixe, sight only |
| 3 | BNP Paribas | BNPAHKHH | Hong Kong | Usance LC | – | 30-180 days | 1% – 4% | – | Sight only |
| 4 | Crédit Agricole CIB | AGRIMQMXXXX | France | Usance LC | – | 30-180 days | 1% – 4% | – | A-rated, LC strict |
| 5 | Alior Bank SA | ALBPPLPWXXX | Poland | Usance LC | – | 30-180 days | 1% – 4% | – | A-rated, LC strict |
| 6 | Indian Bank | IDIBINBBXXX | India | Usance LC | – | 30-180 days | 1% – 4% | – | A-rated |
| 13 | DBS Bank | DHBKHKHH | Hong Kong | Usance LC | – | 30-180 days | 4% – 6% | – | Sight & Usance |
| 35 | Asia-Invest Bank | – | – | Usance LC | – | 30-180 days | – | – | SVG |
| 37 | Israel Discount Bank (IDB) | IDBYUS33 | Israel/USA | Usance LC | – | 30-180 days | – | – | SVG |
| 38 | Caixa Central de Crédito Agrícola | – | Portugal | Usance LC | – | 30-180 days | – | – | SVG |
| 39 | Banca Nazionale del Lavoro | BNLIITRRALX | Italy | Usance LC | – | 30-180 days | – | – | SVG |
| 46 | HSBC Indonesia | – | Indonesia | Usance LC | – | 30-180 days | – | – | SVG |
| 58 | China Construction Bank | CCBQHKAX | Hong Kong | Usance LC | – | – | – | – | SVG |
| 59 | New York Community Bank | NYBCUS33 | USA | Usance LC | – | – | – | – | SVG |
| 60 | Valley National Bank | LUMIUS3N | USA | Usance LC | – | – | – | – | SVG |
| 61 | Artigiancassa SPA | ARTCITR1XXX | Italy | Usance LC | – | – | – | – | SVG |
| 62 | Banca Nazionale del Lavoro SPA | BNLIITRRALX | Italy | Usance LC | – | – | – | – | SVG |
| 63 | Asia-Invest Bank JSC | ASIJRUMMXXX | Russia | Usance LC | – | – | – | – | SVG |
| 65 | Israel Discount Bank | IDBYUS33 | USA/Israel | Usance LC | – | – | – | – | SVG |
| 76 | DBS Bank (Hong Kong) | DHBKHKHHXXX | Hong Kong | Usance LC | $250K – $1M | 30-180 days | 1% – 4% | – | Verbiage fixe, sight only |
| TIER 2: STRONG COMMERCIAL BANKS (A/BBB RATED) | |||||||||
| 9 | UCO Bank | UCBKHKHHXXX | Hong Kong | Usance LC | – | 30-180 days | 4% – 8% | – | DLC uniquement, verbiage strict |
| 10 | Dah Sing Bank | DSBAHKHHXXX | Hong Kong | Usance LC | – | 30-180 days | 5% – 6% | – | DLC uniquement, verbiage strict |
| 12 | CTBC Bank | CTBKHKHHXXX | Hong Kong | Usance LC | – | 30-180 days | 4% – 6% | – | Sight & Usance |
| 14 | Dushanbe City Bank | LCMDTJ22 | Tajikistan | Usance LC | – | 30-180 days | 3% – 7% | – | Tous instruments |
| 15 | Asia Nexus Investment Bank | AINEMY22XXX | Malaysia | Usance LC | – | 30-180 days | 3% – 7% | – | Tous instruments |
| 17 | Credit Foncier Uganda | CDFOUGKA | Uganda | Usance LC | – | 30-180 days | 1% – 4% | – | Tous instruments |
| 18 | Credit Foncier Germany | CFEGDE82 | Germany | Usance LC | – | 30-180 days | 1% – 4% | – | Tous instruments |
| 21 | Sapelle Intl Bank | GNERLRLMXXX | Liberia | Usance LC | – | 30-180 days | 3% – 7% | – | Tous instruments |
| 23 | Point Bank | POITGB21 | UK | Usance LC | – | 30-180 days | 1% – 4% | – | Tous instruments |
| 24 | Oxford Intl Bank | – | USA | Usance LC | – | 30-180 days | 1% – 4% | – | Instrument via PDF |
| 45 | Standard Chartered Bank (Indonesia) | – | Indonesia | Usance LC | – | 30-180 days | – | – | SVG |
| 75 | Standard Chartered Bank (Hong Kong) | SCBLHKHHXXX | Hong Kong | Usance LC | $250K – $1M | 30-180 days | 1% – 4% | – | Verbiage fixe, sight only |
| 77 | Dah Sing Bank | DSBAHKHHXXX | Hong Kong | Usance LC | $250K – $1M | 30-180 days | 5% – 6% | – | DLC uniquement |
| 79 | Sapelle Intl Bank | GNERLRLMXXX | Liberia | Usance LC | $250K – $50M | 30-180 days | 3% – 7% | – | Swift only, no email |
| 80 | Dushanbe City Bank | LCMDTJ22XXX | Tajikistan | Usance LC | $250K – $50M | 30-180 days | 3% – 7% | – | Swift only, no email |
| 84 | Credit Foncier Germany | CFEGDE82XXX | Germany | Usance LC | $250K – $50M | 30-180 days | 1% – 4% | – | Confirmation 2x possible |
| 87 | Point Bank UK | POITGB21XXX | UK | Usance LC | $250K – $50M | 30-180 days | 1% – 4% | – | LC flexible |
| TIER 3: BANQUES NON NOTÉES MAIS FIABLES (TFC/MTF) | |||||||||
| 16 | ACE Investment Bank | AIBMMYKL | Malaysia | Usance LC | – | 30-180 days | 1% – 4% | – | Tous instruments |
| 19 | Standard Commerce Bank | STDMDMDXXX | USA/RD | Usance LC | – | 30-180 days | 1% – 4% | – | Tous instruments |
| 20 | Unibanque | UNBQGB22 | UK | Usance LC | – | 30-180 days | 1% – 4% | – | Tous instruments |
| 22 | United Bank for Investment | UNTVIQBAXXX | Iraq | Usance LC | – | 30-180 days | 3% – 7% | – | Tous instruments |
| 29 | United Securities Trust | USTSCH21 | Bahamas | Usance LC | – | 30-180 days | – | – | Via MTF |
| 33 | UBB Investment Bank | UBBIMY22 | Malaysia | Usance LC | – | 30-180 days | – | – | SVG |
| 66 | UBB Investment Bank | UBBIMY22 | Malaysia | Usance LC | – | – | – | – | MTF Providers |
| 78 | Indian Overseas Bank (Singapore) | IOBAHKHHXXX | Singapore | Usance LC | $250K – $5M | 30-180 days | 5% – 6% | – | Sight/Usance LC |
| 81 | Asia Pacific Investment Bank | ASPMMYKLXXX | Malaysia | Usance LC | $250K – $50M | 30-180 days | 1% – 4% | – | Confirmation 2x possible |
| 82 | UBB Investment Bank | UBBIMY22XXX | Malaysia | Usance LC | $250K – $50M | 30-180 days | 1% – 4% | – | Confirmation possible |
| 83 | ACE Investment Bank | AIBMMYKLXXX | Malaysia | Usance LC | $250K – $50M | 30-180 days | 1% – 4% | – | Livraison email & SWIFT |
| 85 | Standard Commerce Bank | STDMDMDXXX | USA | Usance LC | $250K – $50M | 30-180 days | 1% – 4% | – | Livrable swift/email/papier |
| 86 | Amanah Islamic Bank Philippines | AIIPPHM1XXX | Philippines | Usance LC | $250K – $50M | 30-180 days | 1% – 4% | – | LC uniquement |
| TIER 4: BANQUES OFFSHORE / FLEXIBLES | |||||||||
| 7 | Credito Agricole Italiano | CRPPIT2PXXX | Italy | Usance LC | – | 30-180 days | 1% – 4% | – | A-rated |
| 8 | Credito Valtellinese SPA | BPCVIT2SXXX | Italy | Usance LC | – | 30-180 days | 1% – 4% | – | A-rated |
| 34 | Golden Touch Investment Bank | – | – | Usance LC | – | 30-180 days | – | – | SVG |
| 36 | International Commercial Bank (South Sudan) | ICOCSSJBXXX | South Sudan | Usance LC | – | 30-180 days | – | – | SVG |
| 40 | Citizens Bank Guyana | – | Guyana | Usance LC | – | 30-180 days | – | – | SVG |
| 41 | Republic Bank | – | Guyana | Usance LC | – | 30-180 days | – | – | SVG |
| 42 | Scotiabank | – | Guyana | Usance LC | – | 30-180 days | – | – | SVG |
| 43 | Standard Bank (Comores) | – | Comoros | Usance LC | – | 30-180 days | – | – | SVG |
| 44 | Slovenská Sporiteľňa | – | Slovakia | Usance LC | – | 30-180 days | – | – | SVG |
| 47 | Exim Bank Tanzania | EXTNTZTZ | Tanzania | Usance LC | $250K – $100M | 30-180 days | – | – | SVG/EEB |
| 48 | Mauritius Commercial Bank | MCBLMUMU | Mauritius | Usance LC | $250K – $100M | 30-180 days | – | – | SVG/EEB |
| 49 | ABC Banking Corporation | ABCKMUMU | Mauritius | Usance LC | $250K – $100M | 30-180 days | – | – | SVG/EEB |
| 50 | Maubank Ltd | MPCBMUMU | Mauritius | Usance LC | $250K – $100M | 30-180 days | – | – | Flexible/EEB |
| 51 | Aktif Bank | CAYTTRIS | Turkey | Usance LC | $250K – $100M | 30-180 days | – | – | Conditions sur demande/EEB |
| 52 | United Bank for Africa Mozambique | UNAFMZMA | Mozambique | Usance LC | $250K – $100M | 30-180 days | – | – | Via SVG confirmé/EEB |
| 64 | International Commercial Bank (South Sudan) | ICOCSSJBXXX | South Sudan | Usance LC | – | – | – | – | SVG |
| 67 | Golden Touch Investment Bank | GTIVMY2LXXX | Malaysia | Usance LC | – | – | – | – | SVG |
| 88 | Euro Exim Bank | EULULCL1XXX | St. Lucia | Usance LC | $100K – $100M | 30-180 days | 4% – 9% | – | Sans garantie ni dépôt |
| TIER 5: AUTRES BANQUES RELAIS / SECONDAIRES | |||||||||
| 11 | Indian Overseas Bank | IOBAHKHHXXX | Hong Kong | Usance LC | – | 30-180 days | 5% – 6% | – | DLC uniquement, verbiage strict |
| 24 | Oxford Intl Bank | – | USA | Usance LC | – | 30-180 days | 1% – 4% | – | Instrument via PDF |
| 25 | Tabarak Investment Capital | TIBIAEADXXX | Dubai | Usance LC | – | 30-180 days | 0.25% – 2% | – | Livraison email & SWIFT |
| 26 | Digital Commercial Bank | – | Dubai | Usance LC | – | 30-180 days | 1% – 4% | – | SBLC > $25B |
| 27 | Asia Pacific Investment Bank | ASPMMYKL | Malaysia | Usance LC | – | 30-180 days | 1% – 4% | – | Flexible |
| 28 | Merchant International Bank | MCGONZ21/MCGPUS51 | UK/USA | Usance LC | – | 30-180 days | 1% – 4% | – | Instrument papier |
| 30 | PG Asia Investment Bank | AINEMY22 | Malaysia | Usance LC | – | 30-180 days | – | – | SVG |
| 31 | Soleil Bank | SCGRUS33 | USA | Usance LC | – | 30-180 days | – | – | SVG |
| 32 | IMB Ltd | – | St. Kitts & Nevis | Usance LC | – | 30-180 days | – | – | SVG |
| 53 | Banco Micro Capital | – | Tanzania/Global | Usance LC | – | – | – | – | YGC Profile |
| 54 | Union Banco Credit | – | Zambia/Global | Usance LC | – | – | – | – | YGC Profile |
| 55 | UOB Global Capital | – | UK/Global | Usance LC | – | – | – | – | YGC Profile |
| 56 | Acumen Bank | – | Comoros | Usance LC | – | – | – | – | YGC Profile |
| 57 | United Trust Bank | – | UK/UAE | Usance LC | – | – | – | – | YGC Profile |
| 66 | UBB Investment Bank | UBBIMY22 | Malaysia | Usance LC | – | – | – | – | MTF Providers |
USANCE LC ADVANTAGES
- Extended Payment Terms: Significantly longer payment deferral compared to standard trade options
- Draft/Bill of Exchange: Involves acceptance/negotiation of drafts, providing flexibility
- Direct Bank Obligation: Bank undertakes to pay at maturity with negotiable instruments
- Working Capital Optimization: Maximizes importer cash flow while securing exporter payment
- Project Financing Alignment: Ideal for capital projects with delayed revenue generation
- Seasonal Business Support: Matches payment timing with cyclical business revenue streams
- Competitive Edge: Enables offering extended terms to buyers or obtaining from suppliers
- Capital Equipment Acquisition: Facilitates major purchases with payment aligned to implementation
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 over time | Capital equipment, major projects | Matches payment to project milestones |
| Transferable Usance | Can be transferred to suppliers/manufacturers | Trading companies, intermediaries | Allows payment term pass-through to suppliers |
| Confirmed Usance | Secondary bank adds guarantee | High-risk countries, new relationships | Reduces country/bank risk for exporter |
| Green/Sustainable | Special terms for environmental projects | Renewable energy, sustainable trade | Preferential rates, extended terms for green products |
| Supplier Finance Enabled | Integration with supplier financing programs | Supply chain financing | Early payment options for suppliers |
| Multi-Drawing | Multiple shipments against single LC | Ongoing supply relationships | Reduced documentation, consistent terms |
| Project-Linked | Terms aligned with project implementation | Infrastructure, construction | Payment schedule matched to project phases |
USANCE LC DOCUMENT REQUIREMENTS
| Required Documents | Purpose | Notes |
|---|---|---|
| Commercial Invoice | Details goods and prices | Must match LC terms exactly |
| Bill of Lading/AWB | Proof of shipment | Clean B/L required, carrier-issued |
| Packing List | Itemizes shipment contents | Weight/dimensions must match B/L |
| Certificate of Origin | Confirms product origin | Often required for customs/duties |
| Inspection Certificate | Verifies quality/quantity | When specified in LC terms |
| Insurance Document | Covers transit risks | Required for CIF shipments |
| Installation Certificate | Confirms equipment setup | For capital equipment/machinery |
| Completion Certificate | Verifies project milestones | For project-linked structures |
| Technical Specifications | Confirms product standards | For industrial/specialized goods |
| Environmental Compliance | Verifies sustainability standards | For green/sustainable structures |
USANCE LC ISSUANCE PROCESS
- Comprehensive Application: Submit detailed application with usance specifics
- Enhanced Due DILLIGENCE
- Term Sheet Negotiation: Finalize payment schedules, conditions, and special requirements
- Structured LC Draft: Review and approve comprehensive LC text with payment obligations
- Fee Payment & Collateral: Arrange fees and any required security/collateral
- SWIFT Issuance: LC transmitted via secure MT700 message with usance payment terms
- Advising/Confirmation: Receiving bank advises and potentially confirms the credit
- Maturity Management: Systematic tracking of payment obligation dates
- Compliance Verification: Thorough document checking against LC conditions
- Scheduled Payment Execution: Automatic payment at usance maturity date(s)
USANCE LC TERM OPTIONS
| Term Length | Typical Usage | Industries | Financing Options |
|---|---|---|---|
| 30-90 Days | Standard trade transactions | General merchandise, consumer goods | Discounting, forfaiting |
| 91-180 Days | Extended manufacturing cycles | Consumer goods, electronics | Discounting, forfaiting |
| 181-270 Days | Seasonal demand cycles | Agriculture, fashion | Inventory financing, seasonal loans |
| 271-365 Days | Significant capital projects | Construction, infrastructure | Project finance, bridge loans |
| 366-730 Days | Complex manufacturing/implementation | Heavy machinery, industrial plants | Long-term loans, capital leasing |
| 731 Days+ | Long-term infrastructure/development | Public works, energy | Project bonds, syndicated loans |
USANCE LC PRICING STRUCTURE
- Issuance Fee: Typically 0.25% – 2% of LC amount, covers administrative costs
- Maturity Interest: Calculated based on deferred period and risk profile
- Documentary Credit Fee: Charged for LC confirmation, typically 0.25% – 1%
- Discounting Fees: If discounting option is utilized, additional fees may apply
- Commitment Fees: For long-term LCs, a fee may be charged on undrawn portions
- Amendment Fees: Charges for any changes to the original LC terms
- Collateral Costs: Costs associated with securing the LC, if applicable
USANCE LC RISK MITIGATION
| 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 compliance verification |
| Market Risk | Hedge currency/interest rate exposure | Forward contracts, swaps |
| Operational Risk | Establish robust internal controls | Regular audits, staff training |
| Legal Risk | Ensure compliance with local laws | Regular legal reviews |
USANCE LC COMPLIANCE
- Anti-Money Laundering (AML): Strict adherence to AML regulations
- Know Your Customer (KYC): Comprehensive KYC procedures
- Sanctions Screening: Regular checks against sanctions lists
- Environmental Regulations: Compliance with green/sustainable standards
- Documentary Compliance: Ensuring all documents meet LC terms
- Reporting Requirements: Adherence to local and international reporting standards
USANCE LC CASE STUDIES
Case Study 1: Capital Equipment Purchase
Background: A manufacturing company needed to upgrade its machinery to increase production capacity.
Solution: A Usance LC with a 365-day term allowed the company to pay for the equipment over a year, aligning payments with increased revenue.
Outcome: The company successfully upgraded its machinery, increasing production by 30% and paying for the equipment without straining cash flow.
Case Study 2: Infrastructure Project
Background: A construction firm won a contract for a major infrastructure project with delayed revenue generation.
Solution: A Usance LC with a 730-day term and multiple installment payments matched to project milestones.
Outcome: The firm completed the project on time, with payments aligned to project phases, ensuring smooth cash flow management.
Case Study 3: Seasonal Business
Background: An agricultural company needed financing for seasonal crops, with revenue generated post-harvest.
Solution: A Usance LC with a 270-day term allowed the company to finance crop production and pay after harvest.
Outcome: The company successfully managed its seasonal cash flow, ensuring timely payments and maximizing profitability.
USANCE LC TRENDS
- Digital Transformation: Increasing use of digital platforms for LC issuance and management
- Green Financing: Growing demand for sustainable trade finance solutions
- Supply Chain Integration: Integration of LCs with supply chain financing programs
- Regulatory Compliance: Enhanced focus on compliance with international trade regulations
- Risk Management: Advanced risk mitigation strategies to protect against market volatility
USANCE LC ADVANTAGES
- Extended Payment Terms: Allows buyers to defer payment until after receiving goods
- Cash Flow Management: Optimizes working capital for importers while securing payment for exporters
- Financing Flexibility: Various tenor options (60/90/120/180/270/360 days)
- Production Financing: Suitable for manufacturing cycles requiring extended timeframes
- Documentary Control: Payment obligation only against compliant shipping documents
- Seasonal Business Adaptation: Aligns payment timing with revenue generation cycles
- Competitive Advantage: Ability to offer extended terms to customers/receive from suppliers
USANCE LC DOCUMENT REQUIREMENTS
| Required Documents | Purpose | Notes |
|---|---|---|
| Commercial Invoice | Details goods and prices | Must match LC terms exactly |
| Bill of Lading/AWB | Proof of shipment | Clean B/L required, carrier-issued |
| Packing List | Itemizes shipment contents | Weight/dimensions must match B/L |
| Certificate of Origin | Confirms product origin | Often required for customs/duties |
| Inspection Certificate | Verifies quality/quantity | When specified in LC terms |
| Insurance Document | Covers transit risks | Required for CIF shipments |
| Draft/Bill of Exchange | Payment instrument | Maturity date must match LC tenor |
| Beneficiary Certificate | Additional declarations | When required in LC terms |
USANCE LC SPECIAL FEATURES
- Discounting Option: Allows exporters to receive immediate payment at discount
- Acceptance Financing: Bank acceptance of draft creates negotiable instrument
- Transferable Structure: Enables trading companies to transfer LC to suppliers
- Back-to-Back Arrangement: Uses master LC to issue secondary LC to suppliers
- Red Clause Provision: Advance payment feature for production financing
- Post-Shipment Financing: Additional funding options after document presentation
- Revolving Structure: Automatically reinstates for multiple shipments
- Installment Payment Terms: Divides payment into scheduled portions
USANCE LC ISSUANCE PROCEDURE
- Application Submission: Complete detailed application with transaction specifics
- KYC & Credit Review: Submit business documentation and undergo credit assessment
- Term Negotiation: Finalize payment terms, tenor, and special clauses
- Draft LC Review: Approve proposed LC text and conditions
- Fee Payment: Transfer issuance fees via approved channels
- SWIFT Issuance: LC transmitted via secure MT700 message to advising bank
- Confirmation: Receive issuance confirmation with reference numbers
- Amendment Option: Modify terms if needed (subject to additional fees)
USANCE LC MATURITY OPTIONS
| Tenor | Typical Usage | Industries | Financing Options |
|---|---|---|---|
| 60 Days | Short consumer cycles, perishables | Food, FMCG | Discounting, forfaiting |
| 90 Days | Standard international trade | General merchandise, textiles | Discounting, post-shipment |
| 120 Days | Manufacturing, seasonal goods | Apparel, electronics | Acceptance financing, discounting |
| 180 Days | Capital goods, industrial equipment | Machinery, industrial | Banker’s acceptance, forfaiting |
| 270-360 Days | Project-related, heavy equipment | Infrastructure, large equipment | Structured finance, syndication |
HOW TO PROCEED
- Select your preferred Usance LC issuing bank based on your transaction requirements
- Complete our specialized Usance LC application form with detailed transaction information
- Submit required KYC documentation and financial statements
- Review and approve your draft LC text with specified tenor
- Upon fee payment, your Usance LC will be issued via SWIFT MT700
- Receive guidance on document preparation and presentation
For specialized Usance LC structures or specific tenor requirements, please consult our Trade Finance advisors.
📢 Important Note: All transactions comply with international banking regulations and UCP 600 guidelines.
🎯 Why Use a Usance LC?
| 🔒 Feature | ✅ Benefit |
|---|---|
| Deferred Payment | Flexible 30–180 days for buyer liquidity |
| Improved Cash Flow | Sell goods before paying |
| Bank Guarantee | Reduced counterparty risk |
| Better Trade Terms | Negotiate volume or discount deals |
| UCP 600 Compliance | Globally accepted, legally protected |
🛠️ Our 5-Step Process
Submit Trade Documents – Including your invoice, contract, and company docs
Tailored LC Structuring – We design the Usance LC terms to match your deal
Approval & Draft Confirmation – You approve the draft before transmission
Fee Payment & SWIFT Processing – Payment of bank fees and formal issuance
LC Issued via SWIFT MT700 – Secure, transparent delivery of the LC
💬 “With NNRV’s Usance LC, we doubled import volume while deferring payment by 90 days.” – Fatou J., West Africa Textiles
🔍 Usance LC vs Other Instruments
| Instrument | Trigger | Best Use | Seller Protection |
|---|---|---|---|
| Usance LC | Compliant documents | Flexible payment trades | 🔒🔒🔒🔒 |
| Sight LC | Immediate verification | Fast cash or perishable goods | 🔒🔒🔒🔒🔒 |
| SBLC | Buyer default | Backup guarantee | 🔒🔒 |
| Bank Guarantee | Contract breach | Projects, Tenders, Leases | 🔒🔒🔒 |
Why Choose NNRV Trade Partners for Usance LC?
✅ Extended Credit Periods – Payment deferral of 30-180 days for business flexibility.
✅ Fast & Secure LC Issuance – Quick processing and compliance verification.
✅ Global Trade Finance Experts – Experience in handling complex international transactions.
✅ Trusted Banking Network – Secure trade backed by reputable financial institutions.
✅ Tailored LC Solutions – Custom payment structures to fit your business model.
✅ Risk Management – Structured under UCP 600 with dual-party protection.
💲 Important Notes on Fees
LC pricing depends on:
Transaction size
Deferred payment duration
Chosen issuing bank policies
🔹 Speak with our LC structuring experts for custom pricing.
🧠 Real Testimonials
“We secured €2.4M in product from Asia with 90-day terms. Game changer.”
Mamadou C., Agro Trader – Senegal
“NNRV helped us unlock supplier credit without upfront cash.”
Sara T., Importer – EU
“Super clear process. Our first Usance LC was issued in 72 hours.”
David M., Heavy Machinery – Cameroon
📚 What Makes Us Different?
✔️ Certified in 40+ Jurisdictions
✔️ ICC-Verified LC Structuring
✔️ Global SWIFT Access
✔️ “Accepted or Refunded” Guarantee
✔️ Trusted for $1M to $100M+ Transactions
❓ Top 5 FAQ – Answered by Experts
1. Can a new company apply for a Usance LC?
Yes, as long as you provide the necessary documents and upfront fees.
2. How long does LC issuance take?
Generally 1–5 working days after full document submission.
3. Is a credit period over 90 days possible?
Yes, up to 180 days, depending on bank and counterparty.
4. What happens at maturity?
The buyer pays on the agreed date. Some banks offer refinancing options too.
5. Can a seller negotiate with a Usance LC?
Yes. Knowing payment is bank-guaranteed, many sellers accept Usance terms.
🔗 Related Services
📖 Strategic Blog Posts
How Usance LCs Improve Importer Liquidity
Usance vs Sight LC – Which One Fits Your Deal?
Real Case: How a 180-Day LC Boosted a Distributor’s Revenue
Get Your Usance LC Today!
Optimize your trade terms with deferred payment security. At NNRV Trade Partners, we issue Usance LCs from top-tier banks to match your global supply chain needs.
📩 Contact Us Now to start your Usance LC application.
☎️ Talk to an Expert | 🌍 Trusted in 40+ Countries | ✅ Flexible 30–180 Day Terms