What is the difference between ssg, escru and ltr of crdts.

Question posted by Richard Putman, on behalf of RP Finance in LU1

What is most popular or best method for small to medium exports. 1000 to 10000 items of small weight.

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Lyn Palmer, on behalf of Business West in BS8.

Hello there

I believe you are asking what the best method of payment would be for the items you are exporting. What you dont say is what the value of each shipment (if theres more than one) is likely to be nor do you say where the goods are going to.

I am unsure what ssg is but believe that the other 2 are Escrow and Letters of Credit.
These are very different methods. Escrow is where the moneyt is placed with a trusted third party such as a lawyer and is not released until the terms of the contract have been met including delivery.

Letters of Credit involve banks in both the exporting country and importing country. It is opened by the buyer through the overseas bank, advised to the exporter by a UK bank and contains conditions and documents that must be produced and effected with all relevent documents then being presented to the UK bank who will submit them to the overseas bank for payment. (this is a very brief explanation of a Letter of Credit) . The Letter of Credit will incur costs for both exporter and importer so therefore the value of the shipment and the profit margin should be considered to ensure this method is viable.

I hope this helps
Regards
Lyn

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