Letter of Credit (LC) is a document issued by a financial institution guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. Letters of Credit are used primarily in international trade transactions of significant value, for deals between a supplier in one country and a customer in another. Almost all LC are irrevocable, they cannot be amended or cancelled.