Letter of credit: Difference between revisions

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{{g}}An old fashioned form of {{t|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.
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Lots of formal rules and legal form-obeisance.


Often talked about, seldom seen, as [[credit support]] for a {{gmsla}}
Often talked about, seldom seen, as [[credit support]] for a {{gmsla}}

Revision as of 14:42, 6 November 2019

The Jolly Contrarian’s Glossary
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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.

Often talked about, seldom seen, as credit support for a 2010 GMSLA

See also

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