Trade Finance — LC, BG & Bill Discounting
Letter of Credit, Bank Guarantee and Invoice Discounting facilities for importers, exporters, contractors and traders. Issued across Government, MNC and Private Banks — ₹50 Lakhs to ₹100 Crore.
About Trade Finance — LC, BG, Bill Discounting
Trade Finance is the umbrella term for the three banking instruments that make modern commerce possible — Letter of Credit (LC) gives your overseas supplier a payment guarantee from your bank so they ship without fear, Bank Guarantee (BG) gives your client or government department assurance that you'll perform a contract, and Bill / Invoice Discounting converts your unpaid receivables into immediate cash. BankBrick arranges sight LCs, usance LCs, financial BGs, performance BGs, mobilisation advance BGs, EPC bid bonds, post-shipment finance, packing credit, factoring and bill discounting — all placed across Government Banks, MNC Banks and Private Banks. We handle the underlying credit appraisal, security creation, margin negotiation and issuance — typically in 7–15 working days. Limits are reviewed annually and scale with your business volume.
Key Features
Letter of Credit (LC)
Sight and Usance LCs for import / domestic purchases. Your bank guarantees payment to the supplier on document presentation — enabling credit terms with global vendors.
Bank Guarantee (BG)
Financial BGs, Performance BGs, Bid Bonds, Advance Payment Guarantees and Mobilisation BGs — essential for EPC contractors, exporters and tender participation.
Bill / Invoice Discounting
Convert post-shipment invoices into immediate cash. Reduce 60–120 day receivables cycles to 24 hours — without breaking buyer relationships.
Packing Credit & Post-Shipment
Pre-shipment credit for exporters at concessional interest (PCFC) and post-shipment finance backed by export orders or LCs.
Multi-Bank Placement
LC/BG sub-limits placed across SBI, BoB, Canara, HDFC, ICICI, Axis, IndusInd, Kotak and others — best commission rates, faster issuance.
Margin Optimisation
We negotiate cash margins (typically 10%–25%) and FD-backed margin structures so working capital isn't needlessly tied up in security.
Why Choose BankBrick for Trade Finance — LC, BG, Bill Discounting?
- Enable global procurement on credit terms via LC — no upfront cash to suppliers
- Win government and PSU tenders that mandate BG — financial, performance, EMD
- Convert 60–120 day receivables into next-day cash via bill discounting
- Lower interest cost than working capital loans for export-linked finance (PCFC, FBP)
- Multi-bank LC/BG sub-limits — diversify counterparty risk and negotiate better commission
- End-to-end issuance support — drafting, submission, beneficiary coordination
Eligibility Criteria
| Entity Type | Proprietorship, Partnership, LLP, Pvt Ltd, Public Ltd |
|---|---|
| Business Vintage | Minimum 2 years of operations |
| Annual Turnover | ₹2 Crore and above (₹5 Crore+ preferred for higher limits) |
| CIBIL — Entity | CIBIL MSME Rank (CMR) of 1–6 |
| Banking Conduct | No major returns / overdraft instances in last 12 months |
| Security | Cash margin (10%–25%), counter-indemnity, collateral or charge over current assets |
Required Documents
| PAN of entity + KYC of promoters/directors |
| Last 2 years audited financials + ITR |
| GST registration + last 12 months returns |
| Last 12 months bank statements (all accounts) |
| IEC code (for import/export LCs) |
| Underlying purchase order / sales contract / tender document |
| Buyer details and credit terms (for bill discounting) |
| Existing sanction letters (if applicable — for enhancement) |
Common Questions,
Clear Answers
Have more questions? Our team is here to help. Reach us on WhatsApp or give us a call.
What is the difference between a Letter of Credit (LC) and a Bank Guarantee (BG)?
An LC is a payment instrument — your bank pays the supplier on presentation of correct shipping documents. A BG is a security instrument — your bank pays the beneficiary only if you default on a contractual obligation. LCs are used in trade (you're buying something); BGs are used in performance assurance (you're promising something will be done).
How long does LC or BG issuance take?
For an existing customer with a sanctioned LC/BG sub-limit, issuance is 24–48 hours after documents are submitted. For first-time setup of a fresh limit, expect 2–3 weeks for credit appraisal, security creation, and the bank's sanction letter — then 24–48 hours for actual issuance.
What is bill / invoice discounting and how is it different from a loan?
You sell your unpaid invoice to the bank at a discount. The bank pays you ~95% upfront and collects the full invoice value from the buyer on due date. It's not a loan against you — it's an advance against your buyer's credit. Limits depend on the buyer's credit profile, not just yours, which is ideal for SMEs supplying to blue-chip corporates and PSUs.
How much cash margin will the bank ask for?
Typical margin is 10%–25% of the LC/BG amount, parked as a fixed deposit lien-marked to the bank. The margin earns FD interest, partially offsetting the LC/BG commission. We negotiate margin reduction based on collateral, banking conduct and the strength of the underlying transaction.
Can I get LC and BG from the same bank that gives me working capital?
Yes — and this is the most cost-efficient structure. LC and BG sub-limits typically sit within your overall fund-based and non-fund-based working capital sanction. Adding sub-limits to an existing CC/OD facility is faster and cheaper than approaching a new bank.
Open Your Trade Finance Limit
LC, BG and Bill Discounting facilities from ₹50 Lakhs to ₹100 Crore — placed across Government, MNC and Private Banks for the best commission rates.