Introduction A letter of credit is the instrument in which a bank guarantees the payment to the alternative party in case of default by the account holder to the issuing bank. In other words, it provides a guarantee to the other bank involved in the transaction as well as its client that it assures the […]
Letter of Credit Vs. A Standby Letter of Credit (SBLC): What Are the Main Different? Read More »
Introduction A standby letter of credit is the guarantee provided by the issuer bank or financial institution that the responsibility of payment will be transferred upon the non-payment of the party to the contract. In this type of instrument, the issuing bank will have to follow all the banking protocols followed by the bank. However,
A standby letter of credit (SBLC) vs Bank guarantee (BG): Detail Explanation Read More »
Definition: A confirmed letter of credit is an instrument that facilitates the international transactions between the willing buyer and willing seller, who live in geographically distanced places and in almost all cases in two different countries of the globe. Both the parties to the transactions are in fear that they will not be able to
What is a Confirmed Letter of Credit? Purpose, Types, Explanation, and More Read More »
Introduction The primary ways to fund the purchase of an investment or assets are lease and financing. The object is the same to provide the hirer the right and procession to an asset. Both financing and leasing facility allows the owners to source valuable assets. Do you know what reasons make lease different from finance?
Introduction In international trading, there is a lack of personal contact, distance, and separate law in each country, etc. To make foreign trading secure, a letter of credit is a well-structured way of payment mechanism. There are 3 parties involved in the letter of credit (LC) process; An importer that request the bank for the
What is a Revocable Letter of Credit? Definition, Example, Types, And More Read More »
Definition: Hypothecation is a term used to describe a borrower offering an asset as a security to a lender in exchange for a loan. The lender becomes the new owner of the secured asset while the borrower still has physical possession of it. The lender can only exercise their right over the asset in case
What does rehypothecation really mean? Definition And More Read More »
A lease is a contract between two parties that allows one party, the lessee, to use the assets of the other party, the lessor, in exchange for periodic payments. Usually, leases last for a prespecified amount of time. A lease agreement can mutually beneficial for both parties, the lessor and the lessee. Legally, there is
What Is Capital Lease Obligation? Example and How to Calculate it? Read More »
A bond is a debt instrument issued to an investor, or holder of the bond, by a borrower. It makes the investor eligible to receive a fixed income after a fixed amount of time. The fixed income comes as a result of the fixed price and interest on bonds. A bond is the most basic
What is the duration of a bond? and How to Calculate It? Read More »
Bonds are debt instruments that investors get in exchange for lending money to a company or even the government. Bonds are valid for a predetermined period and also come with regular interest payments. These interest payments are fixed based on a predetermined interest rate. On maturity, the company or government issuing the bond returns the
What Is Conversion Price? Characteristics And Importance Read More »
Introduction to capital lease To qualify as capital lease, one of the following criteria should be met: Ownership criteria: At the end of lease tenure, the ownership rights shift from the lessor to the lessee. The option of Bargain buys: Under a capital lease, the lessee can buy the asset from the lessor at the
Advantages and Disadvantages of Capital Lease Read More »
