Letter of Credit (LC)
Bank-issued payment guarantee commonly used in international trade to protect both buyer and seller.
Detailed Explanation
A Letter of Credit (LC) is a payment mechanism where the buyer's bank guarantees payment to the seller once specific documentation is produced (typically the Bill of Lading plus the commercial invoice). Common for large orders ($500K+) where both parties want security. Sight LC pays immediately upon document verification; usance LC (30/60/90 days) adds buyer credit period. Typical bank fees: 1-2% of invoice value. Alternative: TT (Telegraphic Transfer) — direct wire transfer, faster but less secure for large unknown counterparties.
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JUST SOLAR GROUP supplies solar modules globally with full documentation and flexible terms.
Related Terms
Incoterm where the seller delivers goods on board the vessel at the port of origin; buyer pays freight and insurance.
Incoterm where the seller pays cost, insurance and freight to the destination port; buyer handles customs clearance.
Incoterm where the seller handles all costs including duty, VAT, and final delivery; buyer does nothing.
Minimum quantity required to place an order; typically one 40HQ container (~430-460 kW) for Tier-1 factories.
OEM = factory makes your branded product; ODM = factory designs and builds based on your spec.