Get the validation necessary to build new business relationships with a letter of credit.

Details
  • Provides guarantee on payments of large purchases to third parties, such as vendor or the government
  • Can also be used to guarantee a service
  • Terms are set by third party
  • Principal generally due on demand
    • No principal balance exists unless payment is required under the terms and conditions of the letter
  • Can replace need for insurance company performance bond
  • Fee is based on face value amount
  • Interest accrues only if beneficiary requests an advance
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