Discount of confirmed letters of credit by Bancolombia
Do you need liquidity on your export sales without affecting the debt facilities? With the discount of confirmed letters of credit by Bancolombia you will have an alternative to boost your business.
Benefits of product
If you are exporter (supplier) you can:
- Enhance the business cycle.
- Increase the productivity of the working capital with a positive impact on value generation of the Company.
- Improve the financial indicators due to the reduction of terms in your accounts´ receivable and provision on said portfolio.
- Avoid using the own debt facilities.
Characteristics of product
- Conditions of the Letter of Credit: of Confirmed Export by Bancolombia, with no discrepancies and through acceptance or deferred payment.
- Minimum operation amount: USD 50.000.
- Minimum discount: USD 100.
- Currency: it applies to letters of credit in confirmed US dollars.
- Disbursement: transfer to the exporter for the operation value less a discount that should be assumed by exporter. The foreign currencies product of the disbursement could be deposited in a foreign clearing account of the exporter.
- Maturity: according to the conditions of the Letter of Credit.
- Credit risk: to the account of the bank issuer of the letter of credit. In any event, the exporter is not liable for payment.
- Partial discounts: applicable since the initial issuance of the letter of credit with the possibility of partial uses. In such case, it is possible to apply the discount for each use. It is not possible to make a partial operation over one use, it should be made over the whole.
- Basis for calculating the discount: real days (360).
- Tax costs: the disbursements for discount operations of letters of credit are exempt from lien on financial transactions (4X1000), provided they are made through deposit to the clearing account of the Colombian exporter.
Rates and fees
The operation rates vary according to the conditions of the letter of credit to be negotiated (term, bank, issuer, and sector).
How to access the product
- When the letter of credit has been issued, confirmed by Bancolombia and without discrepancies, the exporter must agree with the commercial contact the financial and disbursement conditions pursuant to the number of uses.
- The exporter must forward the request for discount of the letter of credit to Bancolombia and make the disbursement according to the instructions submitted by the supplier.
- Upon maturity, the issuer bank proceeds to make the payment of the letter of credit to Bancolombia, in such a way the obligation is paid.
- Once the letter of credit confirmed has been accepted by Bancolombia, the exporter must submit the request for discount of the letter of credit.
Information related to discount of confirmed letters of credit
Termination of product
The termination of our products is subject to the termination of your contractual relation with each of our clients or correspondent banks.
Grounds for termination
- The MIL* approved by the issuer bank is not active.
- The exporter is on the lists of control.
* Maximum Indebtedness Limit: Bancolombia would be willing to make operations for up to the amount of the MIL, per the conditions agreed in the covenants and provided the agreed requirements and procedures are fulfilled for each one of the operations.
¡Get the financial efficiency for your exports!
For any further information, queries or claims, please contact your commercial representative.