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Old 11-10-2008, 10:27   #16
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We have had 5 auto dealerships fold in the Baltimore area since Oct 1st. Several of them were in business for 25+ years. Saturn of Bowie is the latest and it was very successful.

I really wanted to go to the show in Annapolis today but why bother? It would only be a case of "look but don't touch..."
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Old 11-10-2008, 11:01   #17
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Letters of credit in fact, aren't a form of credit at all. They are a means to transfer funds between countries. They are in fact Pre-paid. The funds come out of your account, into the issuing Banks's account and the letter is issued.

Zero risk..... no credit....... Have your broker call Suntrust Bank
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Old 11-10-2008, 11:18   #18
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From Investopedia:

Letter Of Credit

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Old 11-10-2008, 13:22   #19
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From Investopedia:

Letter Of Credit

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thanks, but I've used them many, many times, and know how they work.
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Old 11-10-2008, 15:25   #20
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Well, I have a little problem involving a letter of credit that I never saw before. Usually I receive a letter of credit before shipping to a foreign company. I usually take it to my bank and use it as collateral to borrow enough to complete the order and pay for the shipping. My banker advised me last week not accept foreign letters of credit for a while because he will not be able to take them as collateral until this thing settles down. His credit people have no way to tell which banks are in trouble and are worried about the buyer's bank not being able to fund the letter.
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Old 11-10-2008, 15:36   #21
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I've used them many times but always had funds available to cover the container I was importing. In all cases, me, the buyer, paid for shipping as a separate invoice and was not part of the transaction. I'd buy the goods FOB closest Asian port, and hire my own shipper.

In your case, it sounds like you're on the other end of the transaction, whereas you need the money up front to complete the order?

May I ask what industry has no inventory and needs money up front to manufacture an order and in which shipping is part of the LOC?

Also, I never heard of a US banks ever lending money on them. Bogus LOC's do happen and there is no easy recourse to recover funds internationally. I mean think about how they work. Funds are never released until the goods hit the shipping port. LOC's replace trust in international commerce.

If a bank would lend money on an LOC, you wouldn't need an LOC as banks would just loan everyone the money and take the risk. You must have a stellar relationship with your bank.
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Old 11-10-2008, 17:09   #22
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Way back in the old days (10-12 days ago) a LOC was guaranteed payment for a supplier so I would have though a bank would 'advance' some funds against one.

I have had an open one rolling for 8 years odd. Never used it but it makes one of my suppliers happy that if I did not pay them the bank would. My bank does take that 'facility' into account by making sure I do have the money or at least the ability to borrow it and pay the bank back. Haven't heard anything from the bank but maybe that will change now.
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Old 11-10-2008, 19:55   #23
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Parts brokerage. Usually with companies that are not normally importers so I provide a turnkey shipment. I receive a list of requirements, assemble the order from various sources and ship it FOB port of entry. My bank will not lend for procurement on a foreign purchase order/contract alone so I have to let them hold the letter of credit. Untill this mess gets cleared up I will have to draw on my line of credit.
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Old 11-10-2008, 20:09   #24
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The Pope said Sand. Little did we know it was Quicksand!

This fire is being fueled by the media who live for disaster and fabricate when lacking substance.

The NYSE is frought with overvalued companies that should be weeded out.

I would rather see a return to reality then prop up these "Takers".

Any stock kept over a year should have no Cap gains tax.

There are plenty of well founded solvent banks still out there.

Lastly...Who ever heard of a broker making excauses? ( Ha Ha )

I am heading south where the news does not go and will see what happed when I get back in the spring. Chief! I have some nice onions for the rice and beans
You are wise.
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