pls help choose one option- SBDC or acceptance credit

[dv01001]

hi all
kindly help me choose your answer and give the reason, pls. thanks much

XYZ company in UK sells motor parts to DEF company of Germany on EXW open account basis. XYZ gives a 30 days credit to DEF. DEF now pressing for delivery in Germany and asking for a 90 days credit. If XYZ agrees to give a 90 days credit, they will provide support from their bank to in case of non payment.
The question is that by which product DEF's bank can support XYZ in case of non payment?
a. Standby letter of credit (SBDC)
b. acceptance credit
c. Over draft
d.Non of the above

I chose the answer is a, because SBDC is the instrument issued by the issuing bank (DEF's bank) in favour for XYZ so that XYZ can raise a claim under this SBDC in case of non payment from DEF
But the key is b - acceptance credit is just that after getting the draft accepted by a nominated bank, the exporter (XYZ) can raise finance by discounting the bill
what is your opinion about this case?

[picant]

Hi Pal,

SBLC may be used, considering the maximum credit do you want play, e.g. your deliveries in 90 days amount to EUR 60.000,00, SBLC Amt 60.000,00, you will despatch next supply only on receipt of
payment for EUR 20.000,00. In case of need your buyer will prepay in order to keep its credit in the SBLC amount. Good when you have varous supplies to one buyer. Ciao

[picant]

Hi Pal,

second case, may be interesting from your bank point of view for commissions, you have to receive l/c, present compliant documents and obtain accepted drafts(or undertakings) Your bank will be able to indicate what it prefers to finance your export. Ciao

[cristiand969]

Offering an acceptance letter of credit would suit better both the applicant's and beneficiary's interest as the SBLC (or SBDC) involves double exposure for applicant whereas acceptance DC involves only payment at maturity for DEf and XYZ can discount the proceeds and be paid at sight. XYZ cannot get such payment at sight if a SBLC is involved as SBLC will be used only after 90 days and only if the applicant fails to pay at 90 days