We typically issued letters of credit to finance purchase orders.
Let’s say, for example, our client gets a large order from a retail customer (Costco).
They have to buy goods in China, but don’t have the available cash.
We issue a letter of credit to their international supplier to procure the shipment of goods.
Once the goods are delivered to Costco, our client issues an invoice.
We finance the invoice, holding back funds we have already issued to the supplier via letter of credit and wait for Costco to pay the invoices.
Minimum charge by the bridge funder would be $500 for a L/C, the maximum could be 1.5% of the value of the L/C.