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Calcimator

International Trade Finance Calculator

Calculate letter of credit costs including issuance, confirmation, negotiation fees, and deferred payment financing. Compare LC vs documentary collection vs trade insurance.

Inputs

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Results

LC Total Cost (incl. Financing)

$15,300.00

≈ 8 gaming PCs

LC Cost (% of Shipment)3.06%
LC Issuance Fee ($)$3,750.00
LC Confirmation Fee ($)$2,500.00
LC Total Fees (excl. Financing)$7,800.00
Deferred Payment Financing Cost$7,500.00
Annualized LC Cost (%)12.24%
Documentary Collection Cost$850.00
Trade Insurance Premium$1,750.00
LC vs Insurance Cost Difference$6,050.00
Doc Collection (%)0.17%
Cost Per1000$30.60
How to Use This Calculator
  1. Enter Shipment Value ($), LC Issuance Fee (%), and LC Confirmation Fee (%).
  2. Set LC Negotiation Fee (%), Amendment Fee per Change ($), and Expected Amendments.
  3. Adjust SWIFT Message Fee ($), Payment Tenor (Days) as needed.
  4. Review the LC Total Cost (incl. Financing) ($) result.
  5. Use LC Cost (% of Shipment) (%) and LC Issuance Fee ($) ($) to inform your decision.

How the result changes with Shipment Value ($)

Shipment Value ($)LC Total Cost (incl. Financing)
100,000,000$3,000,300.00
350,000,000$10,500,300.00
650,000,000$19,500,300.00
900,000,000$27,000,300.00

What each input means

Shipment Value ($)
Total value of the goods being shipped.
LC Issuance Fee (%)
Issuing bank fee (typically 0.5-1.5% of LC value).
LC Confirmation Fee (%)
Confirming bank fee for added payment security (0.25-2%).
LC Negotiation Fee (%)
Fee for negotiating/examining documents under the LC.
Amendment Fee per Change ($)
Fee for each amendment to the LC terms.
Expected Amendments
Number of amendments anticipated.
SWIFT Message Fee ($)
Cost per SWIFT message (MT700, MT710, etc.).
Payment Tenor (Days)
Deferred payment period (0 for sight LC, 30-180 for usance).
Discount / Financing Rate (%)
Interest rate for financing the deferred payment period.
Documentary Collection Fee (%)
Bank fee for D/P or D/A documentary collection.
Trade Insurance Premium (%)
Credit insurance premium for open account terms.

What each result means

LC Total Cost (incl. Financing)
All-in cost of the letter of credit including deferred payment financing.
LC Cost (% of Shipment)
LC total cost as a percentage of shipment value.
LC Issuance Fee ($)
Fee paid to the issuing bank.
LC Confirmation Fee ($)
Fee paid to the confirming bank.
LC Total Fees (excl. Financing)
Sum of all LC fees before financing cost.
Deferred Payment Financing Cost
Interest cost for the usance/deferred payment period.
Annualized LC Cost (%)
LC cost annualized for comparison with other instruments.
Documentary Collection Cost
Total cost of using documentary collection instead of LC.
Trade Insurance Premium
Cost of credit insurance for open account terms.
LC vs Insurance Cost Difference
Positive = insurance is cheaper; negative = LC is cheaper.

How this is calculated

Worked example, using the default values

  1. Identify Input Parameters
    4 parameters
    Shipment Value ($) = 500000, LC Issuance Fee (%) = 0.75, LC Confirmation Fee (%) = 0.5, LC Negotiation Fee (%) = 0.25 = 11 input(s) provided
  2. Calculate LC Total Cost
    LC Total Cost = lcTotalFees + financingCost
    15300 = $15,300
  3. Calculate LC Cost
    LC Cost = (lcTotalCostIncludingFinancing / shipmentValue) * 100
    3.06 = 3.06%
  4. Calculate LC Issuance Fee
    LC Issuance Fee = shipmentValue * (lcIssuanceFeePct / 100)
    3750 = $3,750

Engine last updated .

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