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
favouree
confirming bank
back to back letter of credit (L/C)
import letter of credit
deferred payment letter of credit (L/C)
documentary credit
to order bill of lading (B/L)
advised credit
advising bank
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
presentation period
bank loan instrument
freely negotiable credit
counter credit
presenting bank
full invoice value
reimbursing bank
beneficiary of a credit
days date
second issuing bank
bill of lading (B/L)
shipper's indemnity
days sight
silent confirmation
charterparty bill of lading (B/L)
irrevocable credit
deed of assignment
soft clause
clean bill of lading (B/L)
irrevocable letter of credit (L/C)
standby credit
forwarder's bill of lading (B/L)
demand guarantee
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)
account party
favouree
confirming bank
back to back letter of credit (L/C)
import letter of credit
deferred payment letter of credit (L/C)
documentary credit
to order bill of lading (B/L)
advised credit
advising bank
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
presentation period
bank loan instrument
freely negotiable credit
counter credit
presenting bank
full invoice value
reimbursing bank
beneficiary of a credit
days date
second issuing bank
bill of lading (B/L)
shipper's indemnity
days sight
silent confirmation
charterparty bill of lading (B/L)
irrevocable credit
deed of assignment
soft clause
clean bill of lading (B/L)
irrevocable letter of credit (L/C)
standby credit
forwarder's bill of lading (B/L)
demand guarantee
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)
account party
bank to bank letter of credit (L/C)
switched bill of lading (B/L)
accredited party
documentary letter of credit (L/C)
documents sent on approval
time credit
cable for authority
advice for beneficiary
reciprocal letter of credit
domiciled credit
transshipment
advice of credit
transferable letter of credit (L/C)
traveler's check (TC)
certificate of insurance (COI)
notified without engagement
trust receipt
collection basis
notifying bank
underlying transaction
commercial parties
ancillary guaranty
on deck
uniform commercial code (UCC)
commercial set
anticipatory credit
outward credit
engagement
usance letter of credit (L/C)
complete shipment
partial shipment
evergreen clause
drawer
issuing bank
drawee bank
assignable
credit enhancement
drawee
validity
confirmation
due date
beneficiary
switched bill of lading (B/L)
accredited party
documentary letter of credit (L/C)
documents sent on approval
time credit
cable for authority
advice for beneficiary
reciprocal letter of credit
domiciled credit
transshipment
advice of credit
transferable letter of credit (L/C)
traveler's check (TC)
certificate of insurance (COI)
notified without engagement
trust receipt
collection basis
notifying bank
underlying transaction
commercial parties
ancillary guaranty
on deck
uniform commercial code (UCC)
commercial set
anticipatory credit
outward credit
engagement
usance letter of credit (L/C)
complete shipment
partial shipment
evergreen clause
drawer
issuing bank
drawee bank
assignable
credit enhancement
drawee
validity
confirmation
due date
beneficiary
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