Domestic Letters Of Credit or Trust Reciept Line are Credit instruments issued by Banks guaranteeing payments to a Beneficiary to finance purchase of raw materials by the Bank’s Customer. In effect it is a loan granted by the bank as a promise
to pay the exporter to that of the foreign buyer provided that the exporter has complied with all the terms and conditions of the letter of credit. Payment under a documentary letter of credit is based on documents, not on the terms of sale or the physical condition of the goods.
This credit line is designed to provide for working capital requirements easily with access to funds via Promissory Note when needed. Use your credit to cover cashflow requirements to finance receivables, inventories, seasonal operating needs or to meet business expansion needs.
Most if not all banks follow these guidelines when lending to their prospective clients:
- Product Features Line Amount Minimum of PhP 1.0 million
- Line Expiry One year from date of approval
- Interest Rate Based on the prevailing lending rate of the Bank at the time of availment.
- Interest Repricing Monthly
- Repayment Principal payable at maturity of TR; interest payable monthly in arrears
- Collateral TR on goods to be financed. All other collaterals acceptable to the Bank.
Documents needed when applying for the loan credit line:
- Audited and In-House financial statements and must be profitable for the last two years
- BIR stamped Income tax return for the last two years
- Bank statements for the last three months
- Certificate of Business Registration with Department of Trade and Industry or Securities and exchange Commision
- Articles of Incorporation and By-Laws
Documents that are needed by the bank for your collateral:
- Copy of Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT)
- Lot Plan with Vicinity Map
- Tax Declaration of land and or improvements