| Investopedia: "Letter of Credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. Often used in international transactions to ensure that payment will be received." (credit: investopedia.com) |
| Investorwords: "Letter of Credit is a binding document that a buyer can request from his bank in order to guarantee that the payment for goods will be tranferred to the seller. Basically, a letter of credit gives the seller reassurance that he will receive the payment for the goods. In order for the payment to occur, the seller has to present the bank with the necessary shipping documents confirming the delivery of goods within a given time frame. It is often used in international trade to eliminate risks such as unfamiliarity with the foreign country, customs, or political instability." (credit: investorwords.com) |
STAR is a privately held company which has been in the Purchase Order Finance, Letter of Credit and Factoring business since January 1999. Our typical client is a small to medium-sized company in the Import/Export, Wholesale or Manufacturing business. We finance most types of merchandise except for perishables or other products with questionable or extended terms or conditions such as consignment sales. Our clients tend to be undercapitalized, fast-growing businesses, in a pre-sold position with their customers.
| Investordictionary: "Letter of Credit is a document issued by a financial institution on behalf of a buyer stating the amount of credit the buyer has available, and that the institution will honor drafts up to that amount written by the buyer. It gives the buyer the prestige and financial backing of the issuing institution and satisfies the requirements of the seller in completing the transaction. The accepting institution has a prior agreement as to how the buyer will pay for the drafts as they are presented." (credit: investordictionary.com) |
|
