Finance

Trade finance, explained: how LCs and BGs make deals bankable

Letters of Credit and Bank Guarantees are the quiet machinery of international trade. Used well, they let buyers and sellers who have never met transact with confidence.

Rubix Finance Desk4 min read

International trade runs on trust that is engineered, not assumed. Letters of Credit (LC) and Bank Guarantees (BG) are the instruments that engineer it — shifting payment risk onto banks so that a buyer in the Gulf and a supplier in Punjab can transact safely.

The instruments

An LC guarantees payment once agreed documents are presented. Back-to-back and revolving LCs extend this to intermediaries and repeat shipments. A BG assures performance or payment if an obligation is not met.

Our role

Rubix structures and arranges these instruments alongside working capital, export financing and long-term facilities — turning a sound business case into a financing structure a bank will approve.

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