---
title: What is a letter of credit?
description: What is a letter of credit?
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 Apr 10, 2019

# What is a letter of credit?

What is a letter of credit?

A letter of credit (abbreviated as LC) is a document that a buyer of goods instructs a bank to issue, authorizing the seller to draw a specified sum of money under terms. 

These terms are usually that the bank needs to receive certain documents within a given timeframe in order for the seller to draw the money.

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