In the intricate world of international trade, understanding financial instruments is crucial for ensuring smooth and secure transactions. One such instrument is the Usance Letter of Credit (LC), a pivotal tool in global trade that offers flexibility and assurance to both buyers and sellers. This article aims to demystify the usance LC meaning , explore its functions, and highlight its significance in global transactions. What is a Usance LC? A Usance LC, also known as a deferred payment LC or a time LC, is a type of letter of credit that allows the buyer to pay the seller at a later date, post the delivery of goods or services. Unlike a sight LC, which requires immediate payment upon presentation of documents, a usance LC provides a specified timeframe for payment, typically ranging from 30, 60, to 90 days or more after the goods are delivered or the documents are presented. The Mechanics of Usance LC The process of a usance LC involves multiple steps: Issuance: The buyer's bank i
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