Export LC Discounting

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Exporter (Seller) - Details

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Export LC Discounting

Exports Letter of Credit Discounting is actually a short-term credit facility offered by the banks to the clients. In this process, the banks or NBFCs purchases all the documents or bills produced by the client and which are backed by LCs and pay the money to the client against discounting interest for the usance period as per the terms of LC.

How it Works

  • Before getting LC , Exporter shares basic details of trade with www.lcbiding.com to get quote for Export LC Bill Discounting.
  • Selection and acceptance of LC discounting rate and bank by the Client
  • Basic credit information, KYC, details of counterparties, LC issuing banks and exporter business background and any additional information that might be specifically required from Exporter.
  • One-time approvals are generally needed form LC discounting Bank. For each transaction, the financing bank's details (and clauses if any) will need to be incorporated into the LC. It is strongly advised to pre-discuss each transaction to avoid issues later.
  • Once LC is received by discounting bank , Exporter will ship the goods and submit the trade & other related documents required under LC.
  • Discounting Bank will forward the document to confirming bank or LC issuing bank as per the terms of LC
  • Buyer will give acceptance to LC issuing bank once trade documents are received by them and considered proper.
  • Discounting bank / Confirming bank will discount the LC and credit the account of Exporter after deducting interest and other charges for usance period of the LC.


  • What is Export LC bill discounting?

  • How is Export LC bill discounting (LCBD) different from Factoring?

  • Do we need to open an account with the Export LC Bill Discounting bank?

  • Can we obtain financing for pre-shipment if the transaction is backed by a Letter of Credit?

  • What is the procedure for availing Export LC Bill Discounting?

  • What are the things to keep in mind prior to availing the financing?

  • Do we require credit limits to be in place with Export LC discounting bank?