Letters of Credit FAQs

What bank are the letters of credit issued from?

STAR Funding issues letters of credit off of top internationally known banks. STAR Funding has numerous bank relationships to support the needs of clients all over the world.

Will my factory accept a letter of credit?

Most factories will accept a letter of credit; that is up to your factory and their needs. Some factories choose to take a letter of credit so they can borrow against it to cover raw materials while others request one so they are guaranteed to be paid upon performance. STAR Funding will help you speak with your factory to determine how to best fund your purchase orders.

How long can a letter of credit be drawn for?

There is no time limit on how long a letter of credit can be open for. Fees accrue over time so you will want to limit the length of time your letter of credit is open. In some instances, there can be additional fees to extend or change a letter of credit.

Do you do back-to-back letters of credit?

Yes. Back-to-back letters of credit are a great tool to secure a transaction from start to finish while maintaining anonymity and security between your buyer and seller.

What’s the difference between a documentary and a standby letter of credit?

There are a few differences between documentary and standby letters of credit. A documentary letter of credit is a more traditional instrument used in international trade transactions. It serves as a contract for payment between banks when certain terms are met. A standby letter of credit is typically used as a guaranty of payment and not necessarily a payment method in itself.

Will you work with bank guarantees?

No. We do not issue standard bank guarantees. The tools we use to fund purchase order financing and trade transactions are widely accepted and very secure.

Are the letters of credit transferrable?

Yes – a letter of credit can be transferrable.

What is the maximize size letter of credit you can issue?

There is no maximum size letter of credit that can be issued. As long as you have solid purchase orders from credit worthy end customers Star Funding will help you structure and finance the transaction.

What is the minimum size letter of credit you can issue?

There are no minimums for the size of the letters of credit we can issue. There are certain fees associated with Letters of credit so you will want to make sure the profit margin is sufficient enough to cover all fees.


letters of credit

STAR Funding: The Secure Letters of Credit Experts

Get Started with Secure Letters of Credit Today

If your business is looking to get started with letters of credit, look no further. Talk to the team at STAR Funding today to learn more and to get started.

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