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Whenever there may be an import or export of goods amongst borders there may be trade finance concerned. Now to import the goods the corporate MHW must pay for the products, but it wants to make love it possible for the goods should arrive as ordered and thus is hesitating in processing the payment. Let's assume that there's an organization named MHW in India and this company needs to import a certain number of goods from a supplier firm that's positioned in the United States. The importer's bank issues a letter of credit score to the exporter via the exporter's financial institution and promises to pay the required amount as soon as the exporter financial institution supplies the valid documents proving the ordered goods have been loaded to the ship or another means of transport. Now on the identical hand, the exporter is also hesitant to ship the goods, with out being sure that the cost will arrive for the products they provide.