A practical introduction to common instruments used in international commerce. The instrument, governing rules, wording, issuing bank and transaction facts determine what protection is actually provided.
Documentary credits can reduce payment uncertainty when buyers and sellers agree the required documents, timelines and bank roles in advance.
A bank undertaking, issued at the buyer's request, to honour a complying presentation under the credit's terms. It is commonly used in cross-border sale of goods.
Common forms: sight, deferred payment/usance, acceptance, confirmed, transferable and revolving credits, where permitted by the terms.
Key check: shipment documents, expiry, presentation period, discrepancies, issuing-bank risk and applicable UCP rules.
A bank's secondary undertaking that may be drawn when the applicant fails to meet a covered obligation and the beneficiary presents the documents specified in the standby.
Common uses: payment support, performance support, bid security or advance-payment security.
Key check: draw conditions, expiry, governing rules such as ISP98 or UCP600 if expressly incorporated, and bank authentication.
A bank undertaking to pay a beneficiary upon a demand that meets the guarantee's terms. Demand guarantees are often used for performance, advance payment, tender or payment obligations.
Key check: independent or accessory nature, demand wording, documentary requirements, expiry and any URDG 758 incorporation.
The exporter instructs its bank to send commercial documents through banking channels with release instructions for the importer. Banks handle documents and collection—not a bank payment guarantee.
D/P: documents against payment. D/A: documents against acceptance of a time draft.
A written, unconditional order by one party directing another to pay a specified sum to a named party or bearer, subject to applicable law. It may be payable at sight or at a future date.
A written promise by the maker to pay a defined amount to the payee, either on demand or at a specified future date. Enforceability depends on form and governing law.
Working-capital facilities to fund procurement, production and shipment, or to bridge the period between shipment and receipt of export proceeds. Availability depends on borrower and transaction assessment.
A business sells or assigns receivables to a factor, often to accelerate cash flow and outsource collection. Recourse, debtor notification and credit risk allocation vary by contract.
A financier purchases eligible medium-term export receivables, commonly on a non-recourse basis to the exporter, subject to the agreed structure and obligor/bank risk.
Buyer-led or supplier-led programmes that use the credit profile and payment cycle of participants to improve working capital. Confirm the financier, pricing, recourse and accounting treatment.
MT700 is commonly used to issue a documentary credit. MT760 is used for issuance of a demand guarantee or standby letter of credit. MT799 is a free-format message used for bank-to-bank communication; by itself it is not a payment, guarantee or proof of funds. The precise message use depends on current SWIFT standards and the banks' procedures.
Do not rely on screenshots, emailed copies, unverifiable PDFs or an intermediary's claim. Ask your own bank to authenticate the instrument directly through secure bank channels.
Confirm buyer, seller, goods, route, contract, price, shipment and commercial rationale.
Verify the issuing bank, branch, authorised signatories and applicant's banking relationship.
Review the full operative text, governing rules, expiry, claim conditions, fees and amendments.
Use your bank's trade-finance department and authenticated bank-to-bank channels; obtain independent legal review.
Share the commercial context—not confidential banking credentials—and we can help outline the questions to take to your bank and advisers.