What is LC discounting, and when does it make sense?
How exporters turn a usance letter of credit into cash today, what it costs, and the questions to ask before you discount.
Read · 6 minA discrepancy is any point where your documents do not match the LC terms, the rules of UCP 600, or each other. A discrepant presentation can be refused, delayed or charged a fee, and it weakens your position when you ask for financing.
Common discrepancies
| Discrepancy | What the rule expects | How to avoid it |
|---|---|---|
| Late shipment | Shipment on or before the latest date in field 44C. | Plan bookings with a buffer, and ask for an amendment early if the date is at risk. |
| Late presentation | Presentation within the period in field 48, and never after expiry (UCP 600 Art. 14(c)). | Track the deadline from the bill of lading date, not from when you receive the documents. |
| Goods description on the invoice | The commercial invoice must describe the goods as in the credit (Art. 18(c)). | Copy the description from field 45A word for word. |
| Amount over the credit | Invoice not above the credit amount, unless a tolerance applies (Art. 18(b), Art. 30). | Check the tolerance, and that unit prices and totals add up. |
| Data that conflicts between documents | Data must not conflict across documents (Art. 14(d)). | Check weights, marks, ports and quantities on every document. |
| Missing or unsigned documents | Every document in field 46A, signed where required. | Use a checklist built from 46A, and sign where the LC says "signed". |
| Number of originals | The number of originals the credit asks for (Art. 17). | Mark originals clearly and present the full set. |
| Bill of lading details | On-board notation and the carrier's or agent's signature (Art. 20). | Ask the carrier to issue the B/L in the format the LC requires. |
| Insurance cover | At least 110% of the CIF or CIP value, unless the LC says otherwise (Art. 28(f)). | Check the insured amount and the currency. |
A simple routine that prevents most of them
- Read the LC the day you receive it, and ask for amendments immediately.
- Build your document checklist from fields 44C, 45A, 46A, 47A and 48.
- Check every document against the LC, and against each other, before you present.
The GIX Credit pre-check does that last step automatically. It reads the LC and your documents together, and lists each discrepancy with the field, the rule and a suggested fix. It is a pre-screen to help you, not a bank's official examination.