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Trade Finance

Letters of credit, bank guarantees, and international trade settlement.

Articles

Letter of Credit Basics: How an LC Protects Both Sides of a Trade

A Letter of Credit shifts payment risk from the buyer to a bank. Here is how the LC lifecycle works, who the parties are, and why documents matter more than the goods themselves.

30 Jun 2026 · 2 min read

Frequently Asked Questions

A mismatch is called a "discrepancy." The issuing bank can refuse payment until the discrepancy is corrected or the buyer waives it, so exporters should check documents carefully before presentation.
No. An LC is a primary payment mechanism used to settle a trade, while a Bank Guarantee is a secondary commitment that is only invoked if the applicant fails to perform an obligation.