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Alternatives to a letter of credit

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"I would not sell to these companies without a letter of credit. That would just be adding more risk on top of risk. It is risky enough conducting business outside of a person's country; not adding a letter of credit would not be a smart idea."

What if you were a small company and obtaining a letter of credit for each customer would be costly? Would you perhaps look to the reputation of the customer, if possible? How might you go about in doing that and for what type of customers?

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Solution Summary

This solution provides alternatives that companies can explore when obtaining a letter of credit is not an option.

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There are many other ways to determine the credit worth of a new business account. You could contact other references via phone or email to see if they have built up a past record with anyone. You could ask for a copy ...

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