DC Negotiation Bills

• 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.

If documents are clean (i.e. no discrepancies), we can negotiate them and pay you the discounted value of the invoice (i.e. less interest).

If documents are found to contain 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.

In many cases, proceeds from DC negotiation are used to retire corresponding Packing Credits or Import Loans, thereby completing the trade cycle.

At HSBC, we have very experienced staff to review and check the documents for you. Our internal controls and accurate documentary compliance are widely recognised. Make the most of your Export Documentary Credit by having us negotiate the documents for you.

If you want to find out more about our Commercial Banking, please call us on 4 4722 77 (24 hour customer service line) or stop by at your nearest HSBC branch. You could also contact us via e-mail.