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documentary letter of credit

   Also found in: Acronyms 0.01 sec.
documentary letter of credit

Used somewhat like cashier's checks,but with more safeguards.The typical documentary letter of credit will allow payment to a vendor upon the vendor's presentation of the letter and certain documents, such as proof the goods were placed on board a vessel for shipment to the United States.



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Its documentary letter of credit program helps customers save money and expedite payments, both of which help improve cash flow.
The Letter of Credit can be clean -- meaning on documents other than the Letter of Credit are necessary for the beneficiary to receive payment from the issuing bank, or documentary -- meaning some additional documents must be presented along with a documentary Letter of Credit, typically bills of lading in international trade transactions.
The most common type of credit arrangement utilized for international sales is the documentary letter of credit or documentary credit.
 
 
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