The seller request payment from the buyer's bank which then releases payment on the basis of those documents.
In this, the lenders purchase stock on behalf of buyers in both domestic and international market.
It is a complex form if financing which includes lending to borrowers through structures.
Under this, The lender pays upto 90% of the invoice amount as advance to the exporter.
The exporter does not receive payment for an order from the buyer unless the goods are sold!
The exporter receives finance in relation to the receivables. it allows businesses to get better finance terms.