Letter of Credit: We got the top 4 questions

The goal of everyone entering a consortium is to be contemplated and receiving the long-awaited letter of credit. She is the one who allows the acquisition of the good or service by the consortium member.

Because it is so important, this subject still raises many questions. Thus, we listed 4 most common questions about the letter of credit, such as issues involving its receipt, use and correction of values. Keep up!

 

1. What is a letter of credit?

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The letter of credit is the document that every consortium member receives when contemplated. With it you can buy a good or hire a service according to the stipulated value.

To enjoy the letter of credit, you need to be aware that it is an instrument with an exclusive purpose. This means that the recipient can only use it to purchase products that fall into the category determined by the consortium.

In summary, there are three main categories of consortia: real estate, which allows the purchase of any type of property, vehicles, which entitles the purchase of cars of different models, and services, which allows the contraction of travel. , makeovers or aesthetic treatments, for example.

 

2. How to get a letter of credit?

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The safest way to get a letter of credit is by hiring a consortium. With planning and choosing a reliable company, the chances of problems are slim.

Current legislation does not prevent contemplated cards from being purchased. However, this is a bureaucratic process that involves several legal obligations. Also, there is always a risk of falling into scams. Therefore, the ideal is to avoid this procedure.

 

3. How is the value of the letter of credit updated?

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So the letter of credit does not lose purchasing power throughout the consortium, its value is updated periodically. This correction is made following the rules established in the contract, but it is common for it to follow market-established indexes, such as the National Construction Cost Index (INCC) or the General Market Price Index (IGP-M).

The update of the letter of credit also makes the value of the corrected installments, so that the group can honor its commitments and all members can buy the good or contract the desired service.

 

4. How to accelerate contemplation?

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The most common way to be contemplated in a consortium is through raffles made at assemblies. For those who want to accelerate this process, the alternative is bidding. The bid is an offer of advance of the installments made by the consortium. There are three main ways to bid:

  • free throw, where any amount may be offered and the best bid wins;

  • fixed bid, in which it is necessary to give a value according to the established in the contract;

  • embedded bid, where a part of the letter of credit is bid.

Bidding is a great strategy for those in a little hurry. However, you need to carefully check the rules imposed by the administrator. These standards may vary from company to company.

Understanding how the letter of credit works and can be used makes it easy to understand why a consortium is a great option to realize your dreams!

Still any questions? Thinking about hiring a consortium? Contact Rode Brothers, we are ready to serve you!

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