A Letter of Credit is a commitment issued by your bank assuring payment to the supplier, subject to fulfillment of agreed terms and submission of required documents. It provides payment security to both the buyer and supplier.
An LC may be used when:
Purchase volumes are high
The supplier requires stronger payment security
The business relationship is new
Internal credit limits are insufficient
International or high-value transactions are involved
What is a Letter of Credit (LC)?
A Letter of Credit is a commitment issued by your bank assuring payment to the supplier, subject to fulfillment of agreed terms and submission of required documents. It provides payment security to both the buyer and supplier.
An LC may be used when:
Purchase volumes are high
The supplier requires stronger payment security
The business relationship is new
Internal credit limits are insufficient
International or high-value transactions are involved