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Letter of Credit

Suitable for buying and selling products across national borders.

Image of a woman signing documents
  • Security for international trade

  • Financing of products en route

  • Guarantee of payment

What is a Letter of Credit?

A Letter of Credit is a conditional payment confirmation. The buyer’s bank promises to pay the invoiced amount to the seller’s bank, according to the rules described in the Letter of Credit.

Advantages for the buyer

  • the products are sent before the seller receives payment;
  • easier control of the date of the product’s arrival;
  • easier access to credit or a price reduction;
  • the bank will wholly or partly be able to finance the products;
  • The entity providing the Letter of Credit for a product delivery often takes precedence when there is a shortage of stock

Advantages for the seller

  • Security that the payment will be made
  • Financing of the product while it’s en route
  • Can disregard the buyer’s financial position.
    The order cannot be cancelled without consent
  • Guaranteed by the bank that payment will be made on the agreed date

Forms and templates

Would you like to order a Letter of Credit?

An application for a Letter of Credit undergoes the same credit assessment as an application for credit or a loan.

We are available from Monday to Friday between 8.00 a.m. and 4.00 p.m. Call us on 950 91708. If you have a client manager at DNB you can contact them directly.

Letter of Credit FAQ

Our trade finance and guarantee products

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