Letter of credit

Letter of credit (L/C) is a buyer's bank commitment to pay to the seller's bank.

A letter of credit guarantees payment only if the seller meets precisely-defined conditions and presents the prescribed documents within a fixed timeframe. These documents commonly are:

1. VAT invoice
2. Delivery list
3. CMR evidencing goods consigned to the buyer (CMR confirms that the materials have been loaded on the lorry or other collecting vehicle).

To get a letter of credit or get more information about it, contact your bank.