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Main types of LC Irrevocable LC. This LC cannot be cancelled or modified without consent of the beneficiary (Seller). Revocable LC. Stand-by LC. Confirmed LC. Unconfirmed LC. Transferable LC. Back-to-Back LC. Payment at Sight LC.
A letter of credit, or a credit letter, is a letter from a bank guaranteeing that a buyers payment to a seller will be received on time and for the correct amount. If the buyer is unable to make a payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.
There are five commonly used types of letter of credit. Each has different features and some are more secure than others.
A letter of credit is essentially a financial contract between a bank, a banks customer and a beneficiary. Generally issued by an importers bank, the letter of credit guarantees the beneficiary will be paid once the conditions of the letter of credit have been met.
Irrevocable letters of credit can either be confirmed or unconfirmed. Confirmed letters require that another financial institution guarantees the payment, which is usually the case when the beneficiary does not trust the other partys bank. Revolving letters of credit are designed for multiple uses.
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Main types of LC Irrevocable LC. This LC cannot be cancelled or modified without consent of the beneficiary (Seller). Revocable LC. Stand-by LC. Confirmed LC. Unconfirmed LC. Transferable LC. Back-to-Back LC. Payment at Sight LC.
An LC contract is an instruction wherein a customer requests the bank to issue, advise or confirm a letter of credit, for a trade transaction. An LC substitutes a banks name and credit for that of the parties involved. The bank thus undertakes to pay the seller/beneficiary even if the remitter fails to pay.
Credit Documents mean the agreements, instruments, certificates or other documents at any time evidencing or otherwise relating to, governing or executed in connection with or as security for, a Loan, including without limitation notes, bonds, loan agreements, letter of credit applications, lease financing contracts,
Main types of LC Irrevocable LC. This LC cannot be cancelled or modified without consent of the beneficiary (Seller). Revocable LC. Stand-by LC. Confirmed LC. Unconfirmed LC. Transferable LC. Back-to-Back LC. Payment at Sight LC.
Examples of Credit Documents for Commercial Loans Operating agreements. Bylaws. Corporate financials. Accounts receivable statements.

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