LoC trade

Letter of Credit (LoC) trade is a financial agreement used in international commerce to ensure payment between buyers and sellers. When a buyer and seller agree on a transaction, the buyer’s bank issues a LoC to guarantee payment to the seller once certain terms are met, like delivering goods. This reduces risks for both parties—sellers get assurance of payment, and buyers ensure goods are shipped as agreed. LoCs facilitate trust and smooth transactions across borders, supporting global trade by providing a secure and reliable mechanism for payment assurance.