A letter of Credit is a conditional undertaking made by the bank to pay the exporter (seller) for goods exported, provided the exporter presents documents called for under the Letter of Credit and which comply with the credit terms and conditions. Trading partners who are not too familiar or comfortable to deal with each other or are in doubt of receiving the foreign currency payments for goods exported normally use this instrument.
- It is a letter of undertaking,
- It is drawn based on an underlying agreement or contract,
- It is a mode of payment,
- Has a specified tenure i.e. 90 days, 180 days etc
Our current indicative terms and pricing are as follows:
- Maximum Tenor 360 days
- Interest Rate 12 – 18% per annum (negotiable)
- Facility Fee 3-5% flat (recovered upfront on approval of facility)
What you need to apply
- Must clearly state the facility amount required e.g. Loan/Overdraft for USD 10,000.00.
- Specify tenor/period of the facility.
- Purpose of the facility i.e. working capital requirements, order finance etc.
- Provide source of repayment.
- Company documents i.e. Certificate of Incorporation – CR14, CR6 or Constitution.
- Shareholding Structure and percentage shareholding.
- Related firms – provide family tree
- Lines of business and comment on your market share, major clients
- Competitor analysis.
- Directorship & Senior Management Profiles; including ages, academic & professional qualifications, occupation and work experience/history. Provide CVs for key management personnel.
- Latest and valid Tax Clearance certificate.
- Latest management accounts.
- Audited financial statements for the past two years.
- Cashflow Projection covering the tenor of the facility requested.
- Aged Creditors & Debtors Analysis, if any.
- Confirmed orders.
- Pro –forma Invoices (for intended expenses).
- Proposed security to cover the borrowing (preferably title deeds).
- Valuation of the proposed security – to be done by professional valuers.
- Current banking arrangements with other banks, including existing Credit Facilities, (Bank, Branch, Account Number, Branch/Relationship Manager, time with the Bank). Provide statements for the past six months.
- Your CBZ Account Number and Branch.
- Geological Reports showing the availability of resource.