Application or amendment Letter of Credit

You instruct Rabobank to open an L/C in favour of your overseas supplier. Within this document, all payment and delivery terms are agreed upon beforehand. You can also describe the goods ordered and the necessary documents. These will include commercial invoices and transport documents, but may also include a specific quality certificate that must be provided. This gives you more influence over compliance with the delivery agreements.

Once your supplier has received the L/C, they will arrange delivery and prepare the necessary documents. Your supplier's bank will then submit these trade documents to Rabobank. Rabobank will then check whether they meet the conditions of the L/C.

Please note

Rabobank is obliged to pay if your supplier's documents meet all the conditions described in the L/C. This means your supplier no longer depends on you for payment. If the documents contain any discrepancies, payment will only be made if you accept these specific deviations. That is why Rabobank requires reassurance from your organisation in advance before the L/C can be opened.

Your overseas buyer instructs their bank to open an L/C. In this, all the payment and delivery conditions are set out and agreed upon in advance. You'll then receive the L/C via Rabobank. Following this, you arrange the delivery and prepare all the necessary documentation. You submit these trade documents to Rabobank. Rabobank then checks the documents and delivers them to your buyer’s bank.

Added security

Are you dealing with a buyer in a country with a less stable economy? In such cases, an L/C alone might not provide sufficient payment security. It's possible that the buyer's bank might also struggle to meet its payment obligations. You can then ask Rabobank to confirm your L/C. This means Rabobank will also undertake the payment obligation, in addition to your buyer's bank. A condition for this is that we consider the risk to be acceptable. There are costs associated with confirming your L/C. Ask our advisers about the options.

Receive your money immediately

Here's how it works: your overseas buyer asks their bank for an L/C with a confirmation instruction. You agree that they will pay, for example, 90 days after delivery. However, because you don't want to wait three months for your money, you can ask Rabobank to pay out the claim immediately once you present your documents. We call this 'discounting'. A key condition for this is that Rabobank has confirmed the L/C, and all your documents meet every single L/C requirement. Our advisers will be happy to tell you more about this.

Please note

If you meet all the conditions outlined in an L/C, your overseas buyer’s bank is obliged to pay. Once the validity date has passed, an L/C is no longer in effect.

There are charges associated with opening or amending a Letter of Credit (L/C). You also have the option to choose from a range of additional features for the L/C. You can find these costs detailed in the fee overview for business payment services.