Which of the following is an advantage of the letter of credit system to the exporter?
A)Payment for merchandise only after delivery is made
B)Facilitates obtaining of preexport financing
C)Higher price is obtained for goods
D)Lower shipping costs are incurred

Question

Quizplus · Accepted Answer

An exporter may find that having a letter of credit will facilitate obtaining preexport financing.For example,a bank,having seen the letter of credit,might be willing to lend the exporter funds to process and prepare the merchandise for shipping and this loan may not have to be repaid until the exporter has received his payment for the merchandise.

Which of the Following Is an Advantage of the Letter