For an established importer, Sinosure-backed open account usually beats both alternatives. T/T deposits tie up cash before goods ship, and a letter of credit consumes bank credit lines and fees. Sinosure-backed terms let you pay 60–120 days after shipment without using a bank line. The trade-off is strict payment discipline and a credit review first.
Side-by-side
| T/T (30/70) | Letter of credit | Sinosure-backed open account | |
|---|---|---|---|
| When the supplier is paid | Before shipment | On compliant documents | 60–120 days after shipment |
| Importer cash tied up | 100% before arrival | Margin + fees | 0–30% deposit, often 0% |
| Uses your bank credit line | No | Yes | No |
| Typical importer costs | Cost of capital | Issuance, amendment and discrepancy fees | Usually priced into goods (premium paid by exporter) |
| Supplier’s risk | None | Bank risk | Insured by Sinosure |
| Paperwork | Minimal | Heavy, strict document compliance | Credit review once, then simple invoicing |
| Best for | Small or first orders | High-value one-off deals, new relationships | Repeat purchasing at scale |
Cash-flow example
An importer buys USD 200,000 of goods per month with a 60-day production-plus-transit cycle and sells within 45 days of arrival:
- T/T 30/70: roughly USD 200,000 is paid before each shipment lands — cash is out for about 105 days per cycle.
- L/C: cash is preserved, but USD 200,000+ of the bank line is blocked per open L/C, plus fees.
- Net 90 open account: goods are often sold before the invoice is due — the supplier effectively funds the inventory cycle.
When an L/C still makes sense
- The supplier will not join a Sinosure policy and you need security for a large order.
- You are buying capital equipment as a one-off.
- Your country is outside Sinosure’s appetite.
Moving from T/T or L/C to open account
Most importers transition supplier by supplier: first secure a limit with the supplier you buy from most, pay the first invoices perfectly, then extend to other suppliers on the same buyer code. See supplier credit from China.
Frequently asked questions
How is Sinosure credit different from a letter of credit?
A letter of credit (L/C) ties up your bank credit line and cash margin before shipment and pays the supplier on presentation of documents. Sinosure-backed open account uses no bank line: the supplier ships on your approved credit limit and you pay on the due date, typically 90–120 days after shipment. It is usually cheaper and uses less of your working capital.
Learn more →Is Sinosure-backed trade credit a loan?
No. Nobody lends you money. Your supplier extends payment terms (open account) and Sinosure insures that receivable. It does not appear as bank debt, and no collateral or personal guarantee is pledged to a lender — although you must pay each invoice in full on its due date.
Learn more →Do I still need to pay a deposit?
Sometimes a 0–30% deposit remains, with the insured balance paid on 90–120 day terms. Many suppliers move to 100% open account once your limit is approved and you have paid a few invoices on time. The exact split is negotiated per supplier.
See if you qualify for 90–120 day terms
Free 2-minute eligibility check. Instant preliminary result, no obligation.