Success through invoice factoringLetters of Credit






Call us to find out more!

877.531.2369 x101 or 417.437.3949




Home Up

Receivable Finance
Healthcare Factoring
Construction Factoring
Purchase Order Finance
Debt Management
Letters of Credit
Consumer Finance


Find Joel Clark on:




What are Letters of Credit?

A letter of credit is a payment guarantee given by a bank - (the issuing bank)
on behalf of a buyer - (the applicant) to pay a seller - (the beneficiary)
an explicit amount of money on presentation of specified documents representing
the supply of goods as defined and within the specific time limit stated on the Letter of Credit.

The issuing banks role is two-fold; Letters of Credit

The first role is to guarantee to the seller that the bank will pay the seller the amount due if all Compliant Documents*  are presented. This offers security to the seller -

*(the exact documents specified by the Letter of Credit)


                The bank is saying  to your supplier... "We guarantee that you will be paid if you present documents (XYZ)"


Secondly is protecting the buyer's interests by examining the documents, and only paying if these documents comply with the terms and conditions set out in the Letter of Credit.

Where the bank says... "We will  pay your supplier on your behalf only if they present documents (XYZ)"

Note that the Letter of Credit refers to documents representing the goods - Not the goods themselves. Banks are not in the business of examining goods on behalf of their customers.

Typically the documents requested will include
* Commercial Invoice
* Transport Document such as a Bill of Lading or Airway Bill,
* Insurance Document
* Inspection Certificate

     See if you qualify...

[Home] [Services] [Contact Us] [Financial Tools] [World Wide Factoring] [Links]

Phone: 1.417.437.3949 or 1.877.531.2369
Contact Form
Copyright 1998-2013 DIVERSIFIED RESOURCE$ PO Box 3232 Joplin MO 64803-3232
Last modified: 10/26/21