Scenario $15-2.$ Gary owns a small business which manufactures high quality, graphite composite, custom fly rods. The local market has slowed down as more competitors have entered Gary's market. Gary's competitive advantage has been established as being high quality, dependability, and life$-$time warranties. His fly rods are well known for these factors. Gary feels that it is time to go global with his fly rods and target other fly fishing nations.

Gary decided that taking his fly rods international was his best choice for future success. He set up an intermediary to handle his exports and was soon exporting fly rods to Europe. Gary soon began to notice that his new cash flows were not coming as quickly or as reliably as the cash flows from his local markets.

In Scenario $15-2$ above, if Gary were to ask clients for an internationally recognized bank instrument that is issued on behalf of the client and guarantees payment, Gary would be asking for

Letters of credit

Consignment

Documentary collection

Payment in advance