I'm not sure what forum this question is best posted in so I'll start here.

Has anyone handled sight drafts? As far as I can remember, we've not dealt with them but there's a possibility that we will. I can only find reference to them as involving imports and exports. Does a bank negotiate them or they just presented to the debtor and then a check is issued?

We used them extensively at my last bank (over 20 years ago) for all car loans but it doesn't seem that many banks use them any more for that purpose. They sure made life and the loan exception report easier.

How were they negotiated? We have someone that might be getting them from investments and we've no idea how to deal with them.

You would send them thru Collections. If the terms of the draft are met then Collections would pay the draft.

Thank you for the confirmation.

If I remember correctly, a draft is used like a check for payment. Proper documents would be enclosed, e.g. a properly executed car title, and if all paperwork is in order, then the bank would remit (with customer's permission) an official check back to the bank for payment. It is sent through Collections Department.