Ask the Accounting Community

  • 1.  Bank Guarantees/ Letters of Credit

    Posted 04-24-2014 11:51 AM
    We are a small manufacturer of custom industrial equipment sold all over the world.  Because the equipment is custom, most of the order is paid before the order is shipped, nicely limiting our credit exposure. Although we have been in business for 30 years and are a reputable company that always stands behind its equipment, we are understandably receiving more and more requests from customers who are looking for some guarantee they will receive their equipment as promised. I am told that European banks often provide a Bank Guarantee to mitigate this risk for the customer but that no American banks provide them. Since letters of credit are both expensive and cumbersome, we are looking for some other alternative. Any suggestions?

    Thanks,
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    Christine Wilfer CMA, CFM
    XDS
    Appleton WI
    United States
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  • 2.  RE:Bank Guarantees/ Letters of Credit

    Posted 04-25-2014 09:24 AM
    Contact the Export Import Bank of America.  Commonly known as Exim Bank.  They are a division of our Department of Treasury.  Google them to obtain their phone number for your area.

    We insure all of our international risk with Exim Bank.

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    Richard Meyers CPA
    Chief Financial Officer
    Tulsa OK
    United States
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