Bank acceptance is a loan short-term that is made to an exporter or importer in order to facilitate the international trade. In order to carry out a bank acceptance, you start with a letter of credit that supports an international transaction. Once it is finished, its face value must be paid in the future.
Bank acceptance is used for the following:
- It performs its function as if it were a bank loan, allowing banks to relieve themselves from the pressure of the demand for credit from their individuals.
- The value it represents is negotiable: which allows the economic-financial development of the countries to be favored.
Characteristics of bank acceptance
The main defining features of a bank acceptance are the following:
- They are used in transactions that are related to the trading of real estate
- No need to shell out money immediately
- It can be negotiated, as we have indicated above
- Accepted letters cannot be renewed or extended
- The bank decides whether or not to finance the acceptance upon maturity
- The bank also acquires the payment commitment at maturity even though it does not use its resources
What requirements do I have to meet to use a bank acceptance?
In order for an acceptance to be originated, the following cases must occur:
- Have an current account in the bank where it is going to be requested
- Present sales documents, specifically those indicated above
- Have an approved credit in the bank
- That the maturity does not exceed six months
- Present a guarantee similar to that of a documentary credit
- The beneficiary must be identified as such