letter of credit
L/C. A binding document that a buyer can request from his bank in order to guarantee that the payment for goods will be tranferred to the seller. Basically, a letter of credit gives the seller reassurance that he will receive the payment for the goods. In order for the payment to occur, the seller has to present the bank with the necessary shipping documents confirming the shipment of goods within a given time frame. It is often used in international trade to eliminate risks such as unfamiliarity with the foreign country, customs, or political instability.
Related Terms
Related Terms on BusinessDictionary
cash cover
documentary credit
to order bill of lading (B/L)
advised credit
advising bank
favouree
confirming bank
back to back letter of credit (L/C)
import letter of credit
deferred payment letter of credit (L/C)
foul bill of lading (B/L)
latest date for presentation
direct pay letter of credit (L/C)
suicide credit
stale bill of lading (B/L)
bank to bank letter of credit (L/C)
account party
switched bill of lading (B/L)
documentary letter of credit (L/C)
accredited party
documents sent on approval
time credit
cable for authority
reciprocal letter of credit
advice for beneficiary
domiciled credit
transshipment
transferable letter of credit (L/C)
advice of credit
traveler's check (TC)
certificate of insurance (COI)
notified without engagement
trust receipt
collection basis
notifying bank
underlying transaction
commercial parties
on deck
ancillary guaranty
uniform commercial code (UCC)
commercial set
outward credit
anticipatory credit
engagement
usance letter of credit (L/C)
complete shipment
partial shipment
evergreen clause
compliant documents
assignment of proceeds
payment under reserve
assignment under documentary credit
documentary credit
to order bill of lading (B/L)
advised credit
advising bank
favouree
confirming bank
back to back letter of credit (L/C)
import letter of credit
deferred payment letter of credit (L/C)
foul bill of lading (B/L)
latest date for presentation
direct pay letter of credit (L/C)
suicide credit
stale bill of lading (B/L)
bank to bank letter of credit (L/C)
account party
switched bill of lading (B/L)
documentary letter of credit (L/C)
accredited party
documents sent on approval
time credit
cable for authority
reciprocal letter of credit
advice for beneficiary
domiciled credit
transshipment
transferable letter of credit (L/C)
advice of credit
traveler's check (TC)
certificate of insurance (COI)
notified without engagement
trust receipt
collection basis
notifying bank
underlying transaction
commercial parties
on deck
ancillary guaranty
uniform commercial code (UCC)
commercial set
outward credit
anticipatory credit
engagement
usance letter of credit (L/C)
complete shipment
partial shipment
evergreen clause
compliant documents
assignment of proceeds
payment under reserve
assignment under documentary credit
preadvice
financial guarantee
confirmed credit
back to back credit
presentation credit
foreign currency credit
presentation date
forfaiting
correction of document
bank loan instrument
presentation period
freely negotiable credit
counter credit
presenting bank
full invoice value
beneficiary of a credit
reimbursing bank
days date
bill of lading (B/L)
second issuing bank
shipper's indemnity
days sight
charterparty bill of lading (B/L)
silent confirmation
irrevocable credit
deed of assignment
clean bill of lading (B/L)
soft clause
irrevocable letter of credit (L/C)
forwarder's bill of lading (B/L)
standby credit
demand guarantee
drawer
drawee bank
assignable
issuing bank
credit enhancement
drawee
validity
confirmation
due date
beneficiary
financial guarantee
confirmed credit
back to back credit
presentation credit
foreign currency credit
presentation date
forfaiting
correction of document
bank loan instrument
presentation period
freely negotiable credit
counter credit
presenting bank
full invoice value
beneficiary of a credit
reimbursing bank
days date
bill of lading (B/L)
second issuing bank
shipper's indemnity
days sight
charterparty bill of lading (B/L)
silent confirmation
irrevocable credit
deed of assignment
clean bill of lading (B/L)
soft clause
irrevocable letter of credit (L/C)
forwarder's bill of lading (B/L)
standby credit
demand guarantee
drawer
drawee bank
assignable
issuing bank
credit enhancement
drawee
validity
confirmation
due date
beneficiary
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