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Do you want to strengthen your business or want to trade with foreign companies? If yes, then you should be aware of the terms Documentary Collections and Proof of Funds Documents. Documentary Collections are the trade transactions in which the bank the exporter relinquishes the task of collecting payment of goods from the importer to his or her bank, which then sends the shipping documents along with payment instructions to the importer. Documentary Collections give an advantage to both exporters and importers. Under Documentary Collections, the documents will not be provided to the buyer unless the payment or acceptance of the time draft has been received via the buyers bank. For exporters, it gives a considerable warranty of payment and faster collection times. Until the payment is made by the importer the title of goods remains to the exporter. Importers have the surety that they will make the payment of goods at a given time and they can review the copy of the document before making payment. They can also pay through the deferred payment option and this is called Documents against Acceptance. The bank on behalf of the exporter keeps on reminding the buyer until the payment is settled.
Proof Of Funds Documents is a letter confirming that an individual, institution, or business entity has enough funds to make the payment in cash. This type of document is normally issued by a commercial bank or an Institution on the request of the seller to provide confidence and assurance to the seller that the individual or entity typically a buyer has enough funds to complete a transaction by paying the agreed amount of purchase. Proof Of Funds Documents is just an affirmation that the buyer does have the resources to pay the seller on the requested date and does not hold the guarantee from the financial institution. At no time the institution will pay the debt obligation if in the future the buyer is not able to make the payment. The purpose of the document is to make certain that the funds required for the transaction are attainable and legal. Proof Of Funds Documents is beneficial not only for sellers but also buyers. There have been cases where the seller does not trust the buyer to make the payment and sells their goods to another buyer. At this time the buyer will get the creditability and assures that the deal is in his hands until the payment is done.
MCG arranges all these documents conveniently for both the parties involved in trade which helps to resolve the risk of clearing payment between the parties.
For more information visit our website: https://merchantcreditcorp.co/
Merchant Credit and Guarantee Corporation Limited (MCG)
Phone: +64 9 5244269
Email: [email protected]