2. Insist on
3. Draw on
4. To meet you halfway
A: Well, we’ve settled the question of price, quality and quantity. Now what about the terms of payment?
B: We only accept payment by irrevocable letter of credit payable against shipping documents.
A: I see. Could you make an exception and accept D/A or D/P?
B: I’m afraid not. We insist on a letter of credit.
A: To tell you frankly, a letter of credit would increase the cost of my import. When I open a letter of credit with a bank, I have to pay a deposit. That’ll tie up my money and add to my cost.
B: Consult your band and see if they will reduce the required deposit to a minimum.
A: Still, there will be bank charges in connection with the credit. It would help me greatly if you would accept D/A or D/P. You can draw on me just as if there were a letter of credit. It makes no great difference to you, but it does to me.
B: Well, Mr Schmidt, you must be aware that an irrevocable letter of credit gives the exporter the additional protection of the banker’s guarantee. We always require L/C for our exports. And the other way round, we pay by L/C for our imports.
A: To meet you half-way, what do you say to 50% by L/C and the balance by D/P?
B: I’m very sorry, Mr Schmidt, but I’m afraid I can’t promise you even that. As I’ve said, we require payment by L/C.