Features

Here's what you get

  • The ability to manage risk associated with non-payment or non-delivery of goods

  • Maintain visibility and control of your transactions 24/7 via NAB Connect

  • Access to our dedicated Trade & Working Capital Team to help understand your cash flow cycle and challenges, and offer the right solutions for your business

Suitable if you

  1. Buy or sell internationally or locally

  2. Need to give or receive payment security

  3. Typically offer payment terms up to 180 days

Benefits for your business

Minimise risk

Minimise the risk for both importers and exports.

Visibility of your transactions

Maintain visiblity and control through NAB Connect.

Access to specialists

Access to dedicated Trade & Working Capital Specialists to help you understand your cash flow cycle.

Documentary trade

Letters of credit

A letter of credit is an undertaking given by a bank to pay the exporter, provided they meet the terms and conditions of the letter. 

As an exporter, you might ask for a letter of credit if you're unsure of the importer's ability to pay. By receiving a letter of credit from a bank, you gain that bank's payment commitment and minimise your credit risk for the transaction.

As an importer letters of credit allow you to buy goods internationally where you otherwise might not be able to. Leveraging NAB's strong credit ratings, your supplier can be assured of payment and you can meet your business needs.

How it works:

  1. The seller and buyer enter into a contract for the supply of goods

  2. The buyer applies to their bank to have a letter of credit issued, if the bank agrees a letter of credit is issued to the seller through their bank.

  3. The seller ships the goods and prepares the relevant shipping documents.

  4. The seller presents shipping documents through their bank who in turn presents to the issuing bank for payment.

  5. Provided the documents comply with the terms and conditions of the letter of credit the issuing bank pays or gives future dated payment commitment. 

  6. The buyer can then collect their cargo. 

Documentary collections

Documentary Collections are the middle ground between open account trading and letters of credit. A trusted third party - a bank - is involved in releasing shipping documents to the importer and subsequence collections of the payment due to the exporter.

As an exporter you gain comfort knowing the bank will control the shipping documents until the importer has paid or agreed to pay for the goods.

As an importer you do not need to make advance payments prior to the goods being shipped.

Documentary collections can be less expensive than letters of credit, however they have different risks depending on payment and shipping terms.

How it works:

  1. The seller and buyer enter into a contract for the supply of goods.

  2. The seller ships the goods and prepares the relevant shipping documents.

  3. The seller presents the shipping documents to their bank who in turn present to the buyer's bank.

  4. The buyer's bank obtains payment or buyer's commitment to a future dated payment and sends to the seller's bank.

  5. The shipping documents are released to the buyer who can then collect their goods.

Ready to apply?

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Rates and fees

Refer to the Fees Guide for all Documentary trade rates and fees.

Other options for your business

NAB Invoice and Debtor Finance

NAB Invoice Finance gives you quick and easy access to money owed by customers and helps with fluctuations in your cash flow.

Trade finance

Meet your working capital needs with finance for your export, import and domestic trade purposes.

International and foreign exchange

If you’re in the business of importing or exporting, our foreign currency accounts, international payment options and trade finance can all help.

Terms and Conditions

Lending criteria and terms and conditions apply (available on application).

NAB recommends you consider the Product Disclosure Statement or other disclosure document, available from NAB, before making any decisions regarding these products. These products are issued by National Australia Bank Limited ABN 12 004 044 937.