Trade finance, rebuilt as software
The Letter of Credit Alternative for Trades Under $10M
The letter of credit has protected exporters for over a century — and priced most of the world's smaller traders out of that protection. NGDB.AI replaces it for sub-$10M cross-border trades with an AI-underwritten, irrevocable payment guarantee issued on Visa/Mastercard rails in about 30 seconds, at 30–80 basis points. Sellers are paid on certified delivery; buyers get 30–90 days of float.
What a letter of credit actually costs you
A documentary LC is a bank's irrevocable promise to pay the exporter when documents conform — bill of lading, invoice, inspection certificate — under UCP 600 rules. The protection is real. So is the overhead: issuance typically takes 5–10 business days, touches 20+ documents across five or more parties, runs on SWIFT message formats designed in the 1970s, and costs 2–5% of the trade value once issuance, confirmation, negotiation and amendment fees stack up. For a $500K shipment, that is $10,000–$25,000 and two weeks — before anything moves.
Worse, most smaller businesses cannot get one at any price: banks reject roughly 70% of SME trade-finance applications, a structural retreat driven by Basel capital rules and per-client compliance costs — the $2.5 trillion annual trade finance gap.
The alternative: a payment guarantee on card rails
The world already runs an instant, irrevocable, bank-backed payment network: card rails. NGDB.AI uses commercial card pre-authorization to deliver the economic substance of an LC — committed funds, released against documents — at software speed:
Apply with the trade, not paperwork. Buyer submits the trade on the platform. AI underwriting returns an explainable credit decision in under 2 seconds.
Funds committed in ~30 seconds. A pre-authorization on the buyer's commercial card irrevocably reserves the trade value — the seller's guarantee that payment cannot be withdrawn.
Documents stay disciplined. Title documents, SGS inspection at origin and blockchain-anchored certification govern release — the documentary rigor of an LC, digitized.
Seller paid on delivery, buyer keeps float. Capture happens on certified delivery. The seller banks the money; the buyer repays on 30–90 day terms.
Letter of credit vs. NGDB.AI guarantee
| Traditional LC | NGDB.AI guarantee | |
|---|---|---|
| Time to issue | 5–10 business days | ~30 seconds |
| All-in cost | 2–5% of trade value | 30–80 basis points |
| Paperwork | 20+ documents, 5+ parties | One application, documents digital |
| SME approval odds | ~30% (70% rejected) | AI-underwritten, explainable decision in <2s |
| Payment assurance | Irrevocable on compliant documents | Irrevocable card pre-authorization, released on certified delivery |
| Buyer terms | Sight or usance per negotiation | 30–90 day float while the seller is paid on delivery |
| Trade size | Any, if a bank accepts you | Sub-$10M on card rails; >$10M digital LC in <4 hours |
When a letter of credit is still the right tool
Honesty matters in trade finance. For trades above $10M, bespoke sovereign-risk situations, or counterparties that contractually require an MT700, a documentary LC remains appropriate — which is why NGDB.AI also issues a digital letter of credit in under 4 hours for large trades, instead of days. For everything under $10M — the volume banks walked away from — the card-rail guarantee is faster, cheaper and actually available. See import & export financing and the technology behind the decisions.
Frequently asked questions
What is a letter of credit alternative?
Any instrument that gives an exporter the same assurance as a bank letter of credit — irrevocable payment on performance — without the bank's paper process. NGDB.AI issues that assurance as a card pre-authorization on Visa/Mastercard rails: the buyer's funds are committed before goods ship, and the seller is paid on certified delivery.
Is the guarantee really irrevocable like an LC?
Yes. A card pre-authorization is an irrevocable commitment of funds by the issuing bank, the same banking system that stands behind an LC. Release conditions are tied to shipping documents and inspection, mirroring the documentary discipline of UCP 600 practice.
How fast is it, and what does it cost?
Issuance takes about 30 seconds end-to-end, with the credit decision itself under 2 seconds. Pricing is 30–80 basis points, versus the 2–5% all-in cost and 5–10 day issuance of a traditional letter of credit.
What trade sizes does it cover?
The card-rail guarantee covers trades up to $10M — the segment where banks reject roughly 70% of SME applications. Above $10M, NGDB.AI issues a digital letter of credit in under 4 hours instead.
Does the buyer need a bank relationship or collateral?
No new banking relationship is required. Underwriting is AI-driven from the buyer's business data with fully explainable decisions, and qualified buyers get 30–90 days of float while the seller is still paid on delivery.
Which markets are supported?
Sellers and buyers onboard in five minutes with one business number: GSTIN in India, EIN in the United States, and commercial registration numbers in Qatar, the UAE and Saudi Arabia. Financing runs on India–US, UAE and EU corridors today, with the GCC expanding next.
Trade without the letter of credit
Onboard in five minutes with one business number — GSTIN, EIN, or your Gulf commercial registration — and browse financed trades in the live marketplace.