Latest / Cash Flow Conversations with Fexingo: Working Capital, Receivables, and Small Business Finance
How a Letter of Credit Unblocked a Small Exporter's Cash Flow
Episode 63 dives into the story of a small textile exporter in Ahmedabad, India, whose $200,000 shipment to a U.S. buyer was stuck in customs because the buyer's bank flagged the payment terms. Lucas and Luna walk through how a confirmed letter of credit (L/C) turned a two-month wait for payment into a 72-hour liquidity event, and why small businesses exporting goods often overlook this tool. They explain the mechanics of a documentary credit, the difference between an unconfirmed and a confirmed L/C, and the specific fees involved — typically 1 to 3 percent of the shipment value. They…
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