Jul 16, 2020 - 04:54 AM
Please allow me the explain concept of SCO and FCO.
SCO and FCO stand for Soft Corporate Offer and Full Corporate Offer respectively. These are offers from a seller expressing product specifications as well as the terms and conditions of the transaction. It is usually issued on the company’s letterhead. The difference between FCO and SCO is:
An FCO is not “full” without being addressed to the name of a specific party representing a buyer.
An SCO is addressed to the buyer in general but not addressed to anyone specific.
Likewise, it furnishes a prospective buyer with enough understanding of a seller's modus operandi. It gives room to the buyer for negotiation as a buyer might request an alteration of terms and conditions. Generally, SCO is preferred in the import/export business involving commodity sales.
Moreover, these offers show the seller's ability and preparedness for a business transaction with an end buyer. It likewise expresses the details of the products offered whether for export or domestic transactions.
These offers curtail information such as:
- Name of commodity
- Discharge port and type of shipment
- Type of payment accepted
- Procedure to purchase the product, and more
Transaction procedures are one of the most essential parts of SCO/FCO. They make a step-by-step guide on how the transaction will take place.
Check the sample:
Letter of credit: A letter of credit is a payment term used for international sales transactions. It's basically a mechanism, which allows importer or buyer to offer secure terms of payment to exporters or sellers in which a bank (or more than one bank) gets involved. A letter of credit is a document that guarantees the buyer’s payment to the sellers. It is issued by a bank and ensures the timely and full payment to the seller. If the buyer is unable to make such a payment, the bank covers the full or the remaining amount on behalf of the buyer. A letter of credit is issued against a pledge of securities or cash. Banks typically collect a fee, ie, a percentage of the size/amount of the letter of credit.
I hope this helps.
Thanks and regards,