✅ CONFIRMED CREDIT
US Capital Private Bank Knowledge Base
📖 What is a Confirmed Credit?
A Confirmed Credit is a type of letter of credit where the payment obligation of the issuing bank is guaranteed or backed by a second bank, known as the confirming bank. This additional guarantee provides extra security to the beneficiary that payment will be made.
⚙️ Key Features of Confirmed Credit
-
Issued by the issuing bank at the request of the buyer (applicant).
-
Confirmed by a second bank (usually in the beneficiary’s country) that adds its own commitment to pay.
-
The beneficiary can demand payment from either the issuing or confirming bank.
-
Protects the beneficiary against risks such as the issuing bank’s insolvency or political issues in the issuing bank’s country.
💡 Purpose and Benefits
-
Offers greater payment security for exporters or beneficiaries.
-
Reduces country risk and credit risk in international trade.
-
Often used in transactions involving unfamiliar or high-risk markets.
-
Facilitates smoother trade financing and enhances trust between parties.
⚠️ Considerations
-
Confirming banks charge a fee for adding their guarantee.
-
The buyer’s bank must have an agreement with the confirming bank.
-
Beneficiaries should carefully review the terms and conditions of the credit.
🔄 Common Uses
-
International trade deals where the beneficiary wants added security.
-
Transactions in politically or economically unstable regions.
-
When the beneficiary does not fully trust the issuing bank.
📞 Contact US Capital Private Bank
📧 Email: [email protected]
🌐 Website: https://uscapitalprivatebank.com