What Are Letters of Credit?

Posted on

 

Letters of credit have been used for centuries to ease payment in international trade. A letter of credit is a promise to pay. Banks issue letters of credit as a way to ensure sellers that they will get paid as long as they do what they’ve agreed to do. The bank will only issue a letter of credit if they know the buyer will honor payment. Sellers must trust that the bank issuing the letter of credit is legitimate.

To pay on a letter of credit, banks simply review documents proving that a seller performed his required actions. They do not worry about the quality of goods or other items that may be important to the buyer and seller. Letters of credit are common in international trade because the bank acts as an uninterested party between buyer and seller.

Start your Nevada LLC in 24 hours
guaranteed

You don’t need to live in Nevada to enjoy the best asset protection
and audit defense a Nevada LLC can provide.

To learn more about using letters of credit to fund your business, contact a Nevada Corporate Headquarters representative today at 1-800-508-1729.

Tags: Business in Nevada, Corporation, Entity, Entrepreneur, Inc, Incorporate in Nevada, Incorporating Your Business, incorporation, Nevada Corporation, Nevada LLC, New Business, small business, Start a Business

    24 HOUR LLC GUARANTEE

    Speak With a
    Business Expert


    TrustPilot

    Nevada is the best state to incorporate, regardless of where you live.
    Nevada Edge
    GET YOUR FREE e-BOOK

    Download our free E-Book and find out why Nevada is the best place to start your business.

    Download Now

    Search

    Start your Nevada LLC in 24 hours guaranteed

    You don’t need to live in Nevada to enjoy the best asset protection and audit defense a Nevada LLC can provide.

    Categories

    Archives