Israel - Methods of Payment Israel - Methods of Payment
Israeli businesspeople are generally reliable and pay on time. However, as there are always exceptions to the rule, common precautionary measures should be taken when doing business in Israel. The most common method of payment is by Letter of Credit (L/C). Collection without a L/C is not unusual, however. Cash against Documents (CAD) is the most preferred mechanism by many Israeli importers. Since there is no guarantee of payment, as there is in a L/C transaction, some exporters prefer to collect an advance payment or an irrevocable bank guarantee on a certain portion of the sale. This practice is appropriate and recommended when there is no past relationship and experience with the buyer. A combination of L/C and CAD issued for the same Bill of Lading is also accepted by most local banks.
Payment schedules vary. The acceptable terms of payment range from EOM + 30 to EOM + 60 days. It is not unusual for payment to be made after a 90 (sometimes 120) day period. The local banking system provides sources of short and long-term credit and access to venture capital. Some importers have preferred to seek U.S. Export-Import (Ex-Im) Bank financing. Ex-Im Bank has most of the leading Israeli banks as correspondents and may supplement private sources of export financing with medium and long-term loans.
For more information about the methods of payment or other trade finance options, please see the Trade Finance Guide available at: www.Export.gov/TradeFinanceGuide.