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Commercial Letter of Credit

An irrevocable written commitment to pay money. Can be in the form of a commercial letter of credit or simply a letter of credit.

A letter of credit is a document issued by a Hutchinson Credit Union that guarantees the payment of a member's draft. It assures the company you're buying from that they will receive payment.

A commercial letter of credit can be issued in favor of the seller to assure the payment for the cost of goods sold. If the seller delivers the goods to the buyer, and acts in accordance with the conditions agreed upon by both the buyer and the seller as specified in such a letter of credit, will make payment according to the letter of credit. The issuance of a commercial letter of credit helps facilitate business between a buyer and seller in transacting goods between the two parties.


We offer both secured and unsecured letters of credit; subject to our underwriting guidelines.

  • Customized to fit your financial needs.
  • Established for a certain, specified period of time.
  • Letter of credit fees: the greater of 1% of the credit amount or $50.
  • Commercial letter of credit fees: variable, depending upon exact contract terms.


  • Allows you to conduct business with sellers you might otherwise not be able to do business with.
  • Allows you to receive needed goods in a shorter amount of time than might otherwise be possible.

Since a letter of credit is fundamentally an extension of credit, credit approval is required and we may require a cash cover and/or the reduction of other lending limits. Available through our lending group.