DC Negotiations (Exports)

• Facilitates business expansion by enabling you to reinvest your sales proceeds immediately
• Enables you to offer more payment options to your clients without negatively affecting your cash flow
• Mitigates non-payment risk and expedites payment as HSBC checks your documents to ensure full compliance and that errors are corrected before submission to DC issuing bank

Under a Documentary Credit transaction, there is often a time gap between the presentation of shipping documents and the receipt of proceeds from the DC issuing bank. Negotiation allows you to obtain cash immediately upon document presentation and thus significantly improve your cash flow.

The formal meaning of negotiation is the giving of value for a draft or documents, which under the DC terms, the issuing bank has undertaken to pay.

When negotiating:

If documents are clean (i.e. no discrepancies)

• We can negotiate and pay you the discounted value of the invoice (ie. less interest)
• You do not require credit facilities
• Funds may be advanced to you on the same day if documents are presented before noon

If documents have discrepancies

• It may be possible to negotiate under reserve and we will need a letter of indemnity from you. "Under reserve" means that if the issuing bank does not accept the discrepancies and ultimately refuses to pay, you must reimburse HSBC for the advance

Usually, proceeds from DC negotiation are used to repay corresponding Packing Credits or Import Loans, thereby completing the trade cycle.

With over 10,000 offices in 83 countries and territories, your suppliers will likely be able to easily dispatch their collections through our extensive network. As such, your documents will arrive faster, allowing you access to the goods without delay. By banking with HSBC, your suppliers will be paid as soon as your account is debited. There are no hidden interest or payment delays.