Letters of Credit
Start new business relationships or strengthen existing ones. A letter of credit helps you make purchases and transactions, even if you have limited trading experience or credit history with these new business partners.
A standby letter of credit assures that your business will meet its contractual obligations to a third party, giving them great peace of mind. They can also replace the need for costly insurance bonds.
- Summary
- Guarantees you will make payments on large purchases
- Typically issued for a 1-year term or less
- Terms easily renewed
- Fee is based on the face value amount
- Interest accrues only if beneficiary requests an advance
- Cash or marketable securities are generally used to secure the credit
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