Letter of Credit Forum

Go check blogs here about that. There many blogs written about that.

cash for gold - Federal Employee Appeals Lawyer

Let us say that your are supplying machinery or equipment worth USD 1 million. Your buyer needs to know that they will be able to instal that equipment, commission it (ie get it started) and carry out factory acceptance tests (FAT = various test runs to ensure the output is as per specifications). The buyer will therefore want to withhold, or retain, an amount, commonly ten percent, from you until successful FAT. And then they want a guarantee that you will support them with a warranty.

This is commonly done under L/C in two different ways:

1. You draw 90% upon presentation of shipping documents including your invoice showing the full 100% value of the goods minus 10% retention, and later draw the final 10% against presentation of a certificate issued by the applicant that FAT has been carried out;

2. You draw 100% but included with the documents is a bank guarantee for 10% valid typically for eighteen months are shipment dat;

3. Sometimes a comnbination of 1 and 2.

I hope this helps.

Bob