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Whenever there may be an import or export of goods amongst borders there is trade finance concerned. Now to import the goods the company MHW needs to pay for the products, nevertheless it desires to make it possible for the goods should arrive as ordered and thus is hesitating in processing the cost. Let's assume that there is a company named MHW in India and this firm desires to import a certain quantity of products from a supplier company that is positioned within the United States. The importer's financial institution points a letter of credit to the exporter through the exporter's bank and promises to pay the required amount once the exporter bank provides the legitimate paperwork proving the ordered items have been loaded to the ship or every other technique of transport. Now on the same hand, the exporter can also be hesitant to ship the products, with out being certain that the payment will arrive for the products they supply.