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LC Discounting Facility

Every business needs working capital, which has evolved into fund-based and non-fund-based categories. LC Discounting is a highly efficient, non-fund-based facility that borrowers can conveniently access through banks.

In the Indian market, being a developing nation, small to medium to big businesses exist here. Without proper financial arrangements, small and medium businesses struggle. Thus, it can impact the overall profitability of the country’s economy. To counter this issue and exterminate the economic decline, banks, lending firms, and financial institutions provide unsecured business loan facilities. Lending to businesses without collateral causes the interest rates to go higher, and the loan duration shrinks.

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Unsecured Debt Instruments

Unsecured Business Loans
Unsecured Working Capital
CGTMSE Loan
Bill Discounting
Factoring Finance
LC Discounting
Bank Guarantee
Trade Finance

Key Features of LC Discounting Facility

flexible repayment

Improves Business Cash Flow

address document

Issued Against the Collateral or FD

sanction

Opening banks charge fees for issuing LC

Simple paperwork

The ICC issues Guidelines to Smooth International Trade

financial document

LC payment is Document-based

(*T&C Applied)

Steps Involved in the Discounting of LC

When the buyer and seller decide to buy and sell the particular product and want to justify the transaction backed by the LC discounting, the process of LC issuance and discounting of LC starts. The standard process in the LC is as follows –

Step 1

The buyer has to issue the LC to the seller. So he has to approach his banker and request for the issuance of the LC. While applying for the LC the applicant has to provide all the required details for the LC issuance. That may include, the name of the seller, the swift code, amount, details of the products and shipments, etc.

Step 2

Once all the details are received, the opening bank will issue the LC to the seller. Here the LC issuing bank or advising bank will add the name of the advising bank or where LC is expected to get discounted.

Step 3

Once LC is issued, the advising bank will cross-check the authenticity and the given details. If advising banks that justify all the given inputs are correct then it will send the LC to the seller and if any corrections need to be done, it will again send the details to the issuing bank.

Step 4

Receipt of the LC by the seller. At this stage, the seller receives the LC from the buyer. This is the confirmation to the seller that now his payment is confirmed. So, he starts the proceeding for the shipment of the goods.

Step 5

Once the goods are manufactured and shipped to the buyer they will not reach immediately to the buyer. Here the seller will get the bill of lading from the port where he has shipped the goods. The seller will take this bill of lading and will submit it to the advising/ negotiating bank.

Step 6

At this stage, the negotiating bank will take the bill of lading and confirm all the terms and conditions complied with. Once those are confirmed, the advising bank will issue the payment to the seller. This process is also known as LC discounting. At this stage, the advising bank will send the documents to the opening bank (The bank that has issued the LC) and will demand the payment.

Step 7

Once the opening bank receives all the documents, the bank confirms everything with the buyer. Once the buyer confirms all the documents are OK, the issuing bank will take the payment from the buyer and will make the payment to the advising bank.

Advantages of a LC Discounting Facility

To the Seller

  • Protection for the payment
  • Transaction backed by LC is the confirmation of the order and specification. This reduces the risk of the wrong production

To the Buyer

  • Certainty to receive the goods.
  • Issuing LC shows the financial creditworthiness of the seller. Helps to smoother future transactions with sellers and bankers.

Understand the execution process of LC Discounting from the case study.

Let’s schedule a brief call to discuss the LC Discounting Facility!!

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LC Discounting Documents

This is very important, as documentation can be a significant factor in obtaining an LC discounting facility. However, the length of the process is determined by the availability of documentation. Here’s the list:

Owner KYC Documents

  1. Adhar Card (complete page)
  2. Pan Card
  3. Latest Electricity Bill
  4. Current Rent Agreement
  5. Passport Size Photo

Business KYC Documents

  1. GST Certificate
  2. MOA, AOA, Pan Card
  3. Shop Act / Trade License
  4. Certificate of incorporation
  5. Shareholding Pattern
  6. Partnership Deed
  7. Current electricity bill and
  8. Rent Agreement

Banking Documents

  1. All account Bank statements (For the last 12 months)
  2. All current loan sanction letters

Financial Documents

  1. Last 2 years' complete Financials
  2. GST Returns (for last 12 months)

LC Discounting Facility at Terkar Capital

Terkar Capital facilitate LC discounting, a non-fund-based credit facility that offers working capital without collateral, competitive interest rates, flexible loan terms, and a quick application process. It is a great option for businesses in India looking for a reliable and affordable source of working capital.

So, get started today and fuel your business growth with LC discounting facility.

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How Do We Execute?

1. Understanding Client's Requirement

A tailored funding solution based on a thorough evaluation of the client’s business goals and financial requirements.

2. Analysing the Strengths and Opportunities

Leverage the client's financial and operational strengths to optimize their funding prospects.

3. Documentation

Ensuring meticulous preparation of all necessary documents to facilitate a seamless funding process.

4. Identifying the Right Financial Product

Recommending the most suitable financial product to align with the client’s specific goals and requirements.

5. Soft Approval From Financial Institutions

Securing preliminary approval from financial institutions based on the client's profile and funding needs.

6. Actual Submission of the Documents

Submitting all finalised and verified documents to the financial institution for formal processing.

7. Disbursement

Coordinating with financial institutions to ensure timely release of funds.

8. Funding As Required

Providing funds customised to the client’s operational or expansion needs, ensuring business growth.

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Client Feedback

What our clients think about us?

N Nihalani
N Nihalani
☆ ☆ ☆ ☆ ☆

We have had a smooth experience with all our capital arrangements facilitated via Terkar Capital so far. Its very comforting to work with people as professional and straightforward as Vishal and the rest of his team. Thanks for everything.

C Sonawane
C Sonawane
☆ ☆ ☆ ☆ ☆

Thank you Terkar Capital for processing my business loan in just a few working days. Very professional & skilled team. They understood my requirements to a level that were beyond my expectations from any lending company. I strongly recommend Terkar Capital.

24th Mile
24th Mile
☆ ☆ ☆ ☆ ☆

We are very thankful to Terkar Capital for your efforts in arranging facility. Their approach is very simple, professional, and fast! The team is highly responsive that executed the process in short span of time without any hassles. Great work... Thank you!

M Dwivedi
M Dwivedi
☆ ☆ ☆ ☆ ☆

I got an unsecured business loan within 7 working days .their specialized experts verfied all the documents and granted me the loan .getting a business loan from terkar capital is the easiest way to get a loan.

Terkar Capital is a registered brand of Terkar Global Financial Development Pvt Ltd, an Investment Banking Firm with a national footprint. We work extensively with professionals and businesses of all sizes to arrange debt funding instruments.

Financial Products

Unsecured Debt Funding

Secured Debt Funding

Professionals Funding

CGTMSE Loan

Machinery Loan

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Head Office

Castle Eleganza, 103, Bhonde Colony, Dr.Ketkar Road, Erandwane, Pune – 411004, MH-India

Yes@terkarcapital.com

+91 8308629820

Corporate Office

The Capital, Level 7, B-Wing, Plot C – 70, G Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400051.

Mumbai@terkarcapital.com

+91 7414973455

Branch Offices

Nashik | Nagpur | Chhatrapati Sambhaji Nagar | Hyderabad

Operational Presence

Delhi | Bengaluru | Chennai | Kolkata | Ahmedabad | Surat

Growing Nationwide…

Terkar Capital

In Association with:

MSME Global Mart | MCCIA

© Terkar Capital 2024

CIN – U70200PN2023PTC224016

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All formal communication from Terkar Capital will be conducted exclusively through our designated official emails. Do not respond to fraudulent calls or emails claiming to be from Terkar Capital. Contact us using the official coordinates!!

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