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  1. Dictionary
    Let·ter of cred·it

    noun

    • 1. a letter issued by a bank to another bank (typically in a different country) to serve as a guarantee for payments made to a specified person under specified conditions.

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  3. www.investopedia.com › terms › lLetter of Credit: What It Is, Examples, and How One Is Used

    3 days ago · A letter of credit is a bank guarantee that a buyer will pay a seller on time and in full. Learn about the different types of letters of credit, how they work, and why they are used in international trade.

    • Julia Kagan
    • 1 min

  4. en.wikipedia.org › wiki › Letter_of_creditLetter of credit - Wikipedia

    A letter of credit ( LC ), also known as a documentary credit or bankers commercial credit, or letter of undertaking ( LoU ), is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods.

  5. corporatefinanceinstitute.com › letter-of-creditLetter of Credit - What It Is, When To Use It Examples

    A Letter of Credit (LC) is a form of guarantee issued by a bank on behalf of its client. It can be used when trust between counterparties is hard to quantify, such as in cross-border transactions or global trade. Learn the difference between financial and documentary LCs, how they work, and how they are used in financial due diligence.

  6. www.thebalancemoney.com › what-is-a-letter-ofWhat Is a Letter of Credit? - The Balance

    May 30, 2022 · A letter of credit is a written agreement between seller, buyer, and banks that guarantees payment for goods or services. Learn how a letter of credit works, why it's useful, and the different types and features of letters of credit in international trade.

    • Ella Ames

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  8. www.merriam-webster.com › dictionary › letter of creditLetter of credit Definition & Meaning - Merriam-Webster

    Sep 6, 2023 · A letter of credit is a document issued by a bank to a beneficiary or a correspondent, promising to honor a demand for payment in certain conditions. Learn the history, examples, and legal terms of letter of credit from Merriam-Webster dictionary.

  9. www.thebalancemoney.com › how-letters-of-creditHow Letters of Credit Work: Definition and Examples - The Balance

    Oct 29, 2021 · A letter of credit provides protection for sellers (or buyers). Banks issue letters of credit when a business “applies” for one and the business has the assets or credit to get approved. Letters of credit are complicated, and it’s easy to make an expensive mistake when using one.

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