Quick answer
A letter of credit is a bank's promise to pay an overseas supplier once shipping documents meet agreed terms. PO funders often issue LCs on your behalf so you can buy goods without cash upfront.
How an LC works
You agree terms with the supplier, a bank issues the LC, the supplier ships and presents documents, the bank pays.
Common LC types
Sight, usance, standby and transferable LCs.
Using PO financing for LCs
A PO funder can guarantee or fund the LC when your bank won't.
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Talk to a National Invoice Factoring specialist at (929) 658-8087 or apply online — no obligation.
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Written and reviewed by the National Invoice Factoring funding team — specialists in receivables and trade finance since 2009.
