What is Bank Acceptance?

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:

  1. Have an current account in the bank where it is going to be requested
  2. Present sales documents, specifically those indicated above
  3. Have an approved credit in the bank
  4. That the maturity does not exceed six months
  5. Present a guarantee similar to that of a documentary credit
  6. The beneficiary must be identified as such

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