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| Issuing Customer | Beneficiary Customer | |
|---|---|---|
| ADVANTAGES | It guarantees the delivery of goods before payment is made. | It guarantees collection in the event that the customer fails to pay. |
| It provides solvency. | ||
| Tool that allows the importer to negotiate the price, because the exporter is guaranteed to collect payment. | Access to new markets, which the exporter might not necessarily enter unless they were guaranteed to collect payment. | |
| DISADVANTAGES | Financial institutions do not check the goods but are obliged to make the payment provided the correct documentation is provided. | When preparing the export documentation, the beneficiary must ensure it fulfils the terms of the guarantee on the assumption that in the future it may have to be executed. |
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