Template:M summ GMSLA 8.5: Difference between revisions
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Amwelladmin (talk | contribs) Created page with "===... and a {{gmslaprov|Letter of Credit}} is what, exactly? {{lc capsule}}" |
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===... and a {{gmslaprov|Letter of Credit}} is what, exactly? | ===... and a {{gmslaprov|Letter of Credit}} is what, exactly? === | ||
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Latest revision as of 15:04, 7 July 2020
... and a Letter of Credit is what, exactly?
An old fashioned form of credit support. A bank writes an unconditional letter promising to pay a (usually large) sum on money on demand and without argument to a third party on behalf of a client. This gets small companies a bit of breathing space with trade creditors. Banks charge through the nose for them: they are a form of committed funding.
Lots of formal rules and legal form-obeisance.