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.
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.