The term of general bills is 1-5 years (some banks require more than 500,000 USD, and the term of bills is not less than 180 days), which belongs to medium and long-term financing.

The business scope of bill discount under forward letter of credit is often limited to the discount of bank acceptance bills under documentary letter of credit; Forfaiting's financing business scope can be bills of exchange and promissory notes under letters of credit or bank guarantees, and the range of acceptable bills is wider.

3. Banks usually only pay 70%-80% of the face value in the bill discount business under forward letters of credit; Forfaiting financing business, except the necessary expenses, is paid in full in commercial practice.

Extended data:

Some banks strictly control the opening of letters of credit, and after the letter of credit is opened, they relax their vigilance against its amendment, which eventually leads to business risks. Therefore, the modification of the letter of credit, especially the increase of the amount, the extension of the validity period, the modification of documents and the modification of payment terms, should be as strict as when opening the letter of credit.

If an importer has two months' production and processing plus one month's sales repayment period, and a complete production cycle is 90 days, then it is not appropriate for him to apply for opening an L/C in 180 days or 360 days. Therefore, the forward period should be shortened to reduce the risk of banks.

On the one hand, the demand for forward certificates increases, on the other hand, forward certificates are more risky than spot certificates. Therefore, only strict precautions can be conducive to the healthy development of forward letters of credit.

Baidu encyclopedia-usance letter of credit