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Quick DC Comparison Table
Find out which one works best for you
A Documentary Credit (DC) can be confusing. Even after you've decided to use a DC, you still need to decide which type best suits your needs. At its most basic a DC is an undertaking by a bank to make a payment, provided the terms of the credit are met. It is a promise to pay. The main distinguishing feature among the various types of DCs is that some are more suited to transactions involving middlemen or traders. Below is a quick reference guide to choosing the most common types of DCs (for further information on Revolving Documentary Credits and Red Clause Documentary Credits, please contact us)
Quick Reference Guide
| Documentary Credits | Transferable DCs Transferable DCs | Transferred DCs | Standby DCs | |
|---|---|---|---|---|
| Specific to transactions involving traders | No | Yes | Yes | No |
| Buyer requires credit facility to issue DC | Yes | Yes | No | Yes |
| Degree of freedom to specify terms of DC | High | High | Low | High |
| Supplier guaranteed payment if terms are met | Yes | Yes | Yes* | Yes |
| DC issued on a transaction by transaction basis | Yes | Yes | Yes | No |
| Ease of supplier to obtain finance | High | High | Medium | High |
| *Yes, if the terms of the Transferable DC are met. |
Need more information?
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.
