Letters of Credit

Business Letters of CreditOne simple way to make the most of your business relationship with Guaranty is to take advantage of a letter of credit to secure better business terms with vendors and suppliers. 

A letter of credit provides your vendor or supplier with the financial guaranty of payment based on the accounts that you hold with us.  To issue a letter of credit we will review your commercial banking history and loan history with us and determine an optimal threshold of guaranteed credit for your business.

With the assurance of a standby letter of credit you can benefit from:
  • Better price negotiation – a letter of credit assures the vendor they will receive payment which means you are less of a liability on their books which means they are willing to offer up-front discounts on pricing.
  • International business – when doing business overseas a letter of credit is often a requirement in setting up initial business agreements.
  • Building new business relationships – if you’re a start up business or new to an established industry or market it can be difficult to build relationships without a known business history.  A letter of credit gives suppliers a sense of safety in negotiations until they get to know you and your business.
  • Defining Terms of an agreement – a standby letter of credit contains payment terms contingent on delivery confirmation, this can be used to your advantage as a means to verify delivery as well as set the groundwork for payment terms with a new supplier.
Apply for a Business Line of Credit
To have this handy bargaining tool ready when you need it, talk to a business loan officer about securing a standby line of credit for your business now.  Call Guaranty Bank at 319.286.6200 or contact one of our business loan officers for more information.