LC (Letter of Credit)
/glossary/lcBank-issued payment guarantee providing security for buyer and supplier in large transactions.
In detail
Letter of Credit (LC) is a bank-issued document guaranteeing payment to the supplier upon presentation of compliant shipping documents. The LC substitutes bank credit for buyer credit, reducing supplier risk in large or first-time transactions. Types include irrevocable, confirmed, and transferable LCs. LC transactions add 7-14 days to procurement cycle for document processing and require careful attention to terms and document presentation. RP Sales accepts LC for export orders and large public-sector contracts.
Where you'll meet this in procurement
You will meet LC (Letter of Credit) when setting commercial and logistics terms. Spell out LC (Letter of Credit) on the RFQ or PO so price, quantity, delivery point, and lead time are comparable across suppliers and disputes at dispatch are avoided.