What Is Letter Of Credit In International Business. A letter of credit, also known as lc or documentary credit, is a commonly used instrument for effecting payment between a buyer and a seller. Because international trade can be a gamble at best, a letter of credit is a binding legal document that works by promising the seller that he will receive payment for the goods or services.
Letters of credit are complicated, and it’s easy to make an expensive mistake when using one. Banks make charges for providing them, so it's sensible to weigh up the. The primary purpose of a letter of credit is to guarantee payment.
Letters of credit are complicated, and it’s easy to make an expensive mistake when using one.
Simon mcmurtrie, ceo of direct wines sets out the strategies that have worked for. The seller of the goods and services and the ultimate recipient of payment in the business transaction. Letter of credit in international business. A letter of credit, also known as lc or documentary credit, is a commonly used instrument for effecting payment between a buyer and a seller.