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- Reduce the risks of international trade across different countries
- The exporter will be able to secure payment of the goods by providing the documents that meet the terms and conditions as specified in the letter of credit.
- Reduces production risk, if the importer terminates or changes their order
- The exporter can obtain pre-financing from the bank after the goods are shipped until they receive payment (subject to post-payment terms) from the importer
- The definite payment date allows the exporter to manage its cash flow effectively
- Upon presentation of documents that comply with the terms of condition under the LC, the importer will not be able to refuse the payment of the underlying goods