Standby Letters of Credit

A Standby Letter of Credit represents an obligation of California Bank & Trust to the beneficiary of the Letter of Credit. The expectation is that the underlying contract or transaction between the applicant and the beneficiary will be completed as agreed and the Standby Letter of Credit will not be drawn. In the opposite, if the applicant of the Letter of Credit fails to perform, the beneficiary is entitled to draw and California Bank & Trust, as the guarantor of the applicant, is obligated to pay under the Letter of Credit. 

A Standby Letter of Credit can be used for many purposes, including bid bonds, performance bonds, or to support loans or unpaid invoices made on open account purchases – with CB&T serving as a Guarantor in your domestic or international projects, or transactions.

Our International Banking Group offers seasoned professional expertise in setting up even the most complex letters of credit – and will work with you to protect your interests by assuring that proper terminology and safeguards are included and that the terms of the Letter of Credit reflect the negotiations of all parties.

Import Letters of Credit

Essential for any business that purchases goods from overseas, the import letter of credit helps to expedite international trade transactions and assures that sellers will be paid securely.  Import Letter of Credit is a conditional undertaking of payment for your account. It assures that your seller will be paid only after they have fulfilled all their shipment and documentary obligations. The seller benefits by the assurance that CB&T as your banker will pay them once they have presented the required documents and complied with the terms of the Letter of Credit.

California Bank & Trust can help structure your Letters of Credit to match the terms you have negotiated with your vendor and made payable in U.S. dollars or a foreign currency. Payment can be made upon presentation of documents specified in the Letter of Credit (sight) or at a future date after the documents have been presented (usance or deferred). 

Export Letters of Credit

Essential for any business that sells goods to overseas, Export Letter of Credit helps to expedite international transactions and assures that sellers will be paid securely.  The Export Letter of Credit is mostly issued by a foreign bank, the bank of the firm which is buying your goods and services. That bank commits to pay you, the seller, when you have complied with the documentary terms identified in the Letter of Credit.

If you’re the beneficiary of an Export Letter of Credit, we will assist you in complying with the Letter of Credit terms so you will be paid in full within the agreed time limit. Our seasoned international banking specialists will guide you through the process, help you in preparing the required documents correctly in order for you to receive the prompt payment quickly as that’s crucial to your cash flow.

Documentary Collections

If you export goods and services, let expert bankers at California Bank & Trust serve as an intermediary between you and your trading partners through our Documentary Collection services. With this method of payment, we work on behalf of you, the exporter, presenting collection items through the buyer's bank for payment by your customer (the buyer). The collecting bank will not release your documents to the buyer until the payment is made for (D/P) or the Draft is accepted by the customer (the buyer).

We provide documentary collection services (and "clean" collections, drafts without documents) through two of the most common types of collections:

• Documents Against Payment (D/P): the importer/buyer must pay before they can obtain the shipping documents.
  
• Documents Against Acceptance (D/A): the buyer must accept a usance (time) draft before receiving the shipping documents. Acceptance of the draft is the importer's promise to pay at maturity.

Documentary collections should be used in situations where there is a trust relationship between buyer and seller. Under Documentary Collections, banks act as intermediaries between buyer and seller in exchange for title documents and payment. There is no payment guarantee or bank obligation to pay as with a Letter of Credit.