Ask Entrepreneur

What needs to be in place for a bank to produce a letter of credit on my behalf?

I am setting up to source commodities on behalf of clients. Currently employed in an unrelated industry, I'm entering this market due to demand from contacts. As there are huge volumes involved, the transaction are likely to involve huge sums. I am hoping to remain a go-between and charge a commission for deals I help set up. Letters of credit will be required via a bank. What needs to be in place for a bank to agree to produce a letter of credit my behalf? Also, what can I do contractually to prevent the buyer and supplier from cutting me out of the deal?
Since individual banks issue their own letters of credit, take a look at the bank's letter of credit form, and you will see what specific documentation they require. Invoices, shipping arrangements, dates, times, etc.--these will all be required by the bank who issues the letter of credit.

Speak with an attorney about your contracts to make sure you're legally protected to receive the commission they've agreed to give you.

Share Your Thoughts

Today's Editor's Picks

About ASK ENTREPRENEUR

Ask Entrepreneur is a question-and-answer forum for and by the Entrepreneur.com community. Send in your burning business question, or comment on someone else's now. Have a Question? Ask Now

Topics (over 1000+ answers)

Ask Entrepreneur Q&A Hangouts

Google + Hangout With Shark Tank
Google + Hangout With Jason Falls
Google + Hangout With Angela Jia Kim
Google + Hangout With Grant Cardone

ASK Quick Tips