Financing the Materials: Back-to-Back and Transferable LC
The mill wants paying in April. The buyer pays at the end of August. You follow one export order through that gap. You see what the wait costs, what a back-to-back credit costs, and what a transfer costs. You see why the two are not alternatives. And you look at the cheaper routes that are usually better.
Published by Merchandising Academy · First lesson free to read
Course value
What will you be able to do?
Work outcome
You can read a letter of credit for the terms that will refuse your documents, price what a payment term actually costs you in working capital, and choose an instrument that matches the risk you are carrying.
Who it is for
Factory, supplier, brand and buying-office teams.
What you will produce
You build a financing file for one export order. You build the funding gap from dated outflows and price it. You cost a back-to-back line by line against the bank's own tariff. You price a transfer beside it. You run a date-and-document check between two credits. And you compare five funding routes down to a cost per garment.
Learning format
6 lessons · 0 templates · workplace calculations and decisions.
Lessons
- 01The gap you are actually financing🔒20 min
- 02The back-to-back: your buyer's credit as collateral🔒20 min
- 03Transferable: passing part of the credit along🔒18 min
- 04The day the two credits stopped lining up🔒18 min
- 05Who the bank is really taking risk on🔒18 min
- 06The cheaper answers, and why you cannot have them yet🔒16 min