{"id":9074,"date":"2022-07-19T12:26:00","date_gmt":"2022-07-19T12:26:00","guid":{"rendered":"https:\/\/www.tradefinanceglobal.com\/?p=9074"},"modified":"2022-12-12T12:57:14","modified_gmt":"2022-12-12T12:57:14","slug":"usance-letters-of-credit-what-are-they","status":"publish","type":"post","link":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/","title":{"rendered":"Usance letters of credit – what are they? | 2022 TFG Usance LC Guide"},"content":{"rendered":"You have reached the limit to read our content as a guest. Join TFG for free to unlock unlimited access to our industry-leading content. Please sign-up<\/a> or sign-in<\/a> to gain exclusive access to our full library of videos, podcasts, expert guides, and comprehensive research data\u2014all at no cost.","protected":false},"excerpt":{"rendered":"

When using an usance or deferred letter of credit, the issuing bank must make payment by a preset date. This makes planning easier and unlocks working capital.<\/p>\n","protected":false},"author":394,"featured_media":67077,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","ep_exclude_from_search":false,"footnotes":""},"categories":[167,357,104,2129,33,264,32,35],"tags":[934,931,933,932,141,138,723,929,930,928],"class_list":["post-9074","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-business-loans","category-for-exporters","category-letters-of-credit","category-stock-finance","category-supply-chain-finance","category-trade-finance","category-uk-specialists","tag-deferred","tag-deferred-lc","tag-deferred-lc-guide","tag-deferred-letter-of-credit","tag-lc","tag-letter-of-credit","tag-letter-of-credit-guide","tag-usance","tag-usance-lc","tag-usance-letter-of-credit"],"acf":{"main_summary":"","header":"Standard","layout":"Custom","banner_image_above_title":"Yes","is_expert_picks":false,"organisations":null,"users":"","type_of_sidebar":"Standard","sidebar_single":null,"turn_on_featured_posts":"No","additional_on__off":"On","featured_posts_order":"ASC","title_add":"Letters of Credit Hub","number_of_posts_add":"4","category_add":2129,"order_by_add":"DESC","title_link_add":"\/letters-of-credit\/","add_layout_single":null},"yoast_head":"\nUPDATED: What are usance letters of credit | TFG 2022 Usance LC Guide<\/title>\n<meta name=\"description\" content=\"A usance letter of credit is payable at a future point. Read our 2020 TFG Letter of Credit Guide on Usance Letters of Credit for Trade.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Usance letters of credit - what are they? | 2022 TFG Usance LC Guide\" \/>\n<meta property=\"og:description\" content=\"A usance letter of credit is payable at a future point. Read our 2020 TFG Letter of Credit Guide on Usance Letters of Credit for Trade.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/\" \/>\n<meta property=\"og:site_name\" content=\"Trade Finance Global\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/tradefinanceglobal\" \/>\n<meta property=\"article:published_time\" content=\"2022-07-19T12:26:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-12T12:57:14+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2018\/08\/TEMPLATE_FEATURED-IMAGE-Posts-Articles-News-Wires-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1230\" \/>\n\t<meta property=\"og:image:height\" content=\"526\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Marcus Lankford\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@tradefinglobal\" \/>\n<meta name=\"twitter:site\" content=\"@tradefinglobal\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Marcus Lankford\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"9 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/\"},\"author\":{\"name\":\"Marcus Lankford\",\"@id\":\"https:\/\/www.tradefinanceglobal.com\/#\/schema\/person\/50945e60c0287b7339b2e70d2ee9eca9\"},\"headline\":\"Usance letters of credit – what are they? | 2022 TFG Usance LC Guide\",\"datePublished\":\"2022-07-19T12:26:00+00:00\",\"dateModified\":\"2022-12-12T12:57:14+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/\"},\"wordCount\":1707,\"publisher\":{\"@id\":\"https:\/\/www.tradefinanceglobal.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2018\/08\/TEMPLATE_FEATURED-IMAGE-Posts-Articles-News-Wires-1.jpg\",\"keywords\":[\"deferred\",\"deferred LC\",\"deferred LC guide\",\"deferred letter of credit\",\"LC\",\"letter of credit\",\"letter of credit guide\",\"usance\",\"usance LC\",\"usance letter of credit\"],\"articleSection\":[\"Articles\",\"Business Loans\",\"For Exporters\",\"Letters of Credit\",\"Stock Finance\",\"Supply Chain Finance\",\"Trade Finance\",\"UK Specialists\"],\"inLanguage\":\"en-GB\",\"copyrightYear\":\"2022\",\"copyrightHolder\":{\"@id\":\"https:\/\/www.tradefinanceglobal.com\/#organization\"}},{\"@type\":[\"WebPage\",\"FAQPage\"],\"@id\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/\",\"url\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/\",\"name\":\"UPDATED: What are usance letters of credit | TFG 2022 Usance LC Guide\",\"isPartOf\":{\"@id\":\"https:\/\/www.tradefinanceglobal.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2018\/08\/TEMPLATE_FEATURED-IMAGE-Posts-Articles-News-Wires-1.jpg\",\"datePublished\":\"2022-07-19T12:26:00+00:00\",\"dateModified\":\"2022-12-12T12:57:14+00:00\",\"description\":\"A usance letter of credit is payable at a future point. 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He holds a BA in Economics and Politics, with a core focus on International and Environmental Economics, Political Lobbying and Digital Information at Work.\",\"sameAs\":[\"https:\/\/www.kroll.com\/en\",\"https:\/\/www.linkedin.com\/in\/marcus-lankford-a2aa03175\"],\"knowsLanguage\":[\"English\"],\"jobTitle\":\"Restructuring Advisory Analyst\",\"worksFor\":\"Kroll\",\"url\":\"https:\/\/www.tradefinanceglobal.com\/posts\/author\/marcus-lankfordtradefinanceglobal-com\/\"},{\"@type\":\"Question\",\"@id\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487021948\",\"position\":1,\"url\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487021948\",\"name\":\"What is a letter of credit?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\" <p>Before we get into usance or deferred letters of credit, let\u2019s first recap what a normal <a href=\\\"https:\/\/www.tradefinanceglobal.com\/posts\/letters-of-credit-explained-how-can-they-help-your-trading-business-grow-and-how-do-you-apply-for-one\/\\\">letter of credit<\/a> is.\u00a0If you\u2019re an importer or an exporter, you will probably want your goods and cash to be as safe as possible during a trade transaction.<\/p>\",\"inLanguage\":\"en-GB\"},\"inLanguage\":\"en-GB\"},{\"@type\":\"Question\",\"@id\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487081186\",\"position\":2,\"url\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487081186\",\"name\":\"How does a letter of credit work?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"<br\/>Let\u2019s suppose that an importer wants to purchase goods from an exporter in a trade transaction. To secure the transaction using a letter of credit, the importer can apply for a letter of credit from an \u2018issuing bank\u2019 (so called because this is the bank that will <em>issue<\/em> the letter of credit).\",\"inLanguage\":\"en-GB\"},\"inLanguage\":\"en-GB\"},{\"@type\":\"Question\",\"@id\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487478976\",\"position\":3,\"url\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487478976\",\"name\":\"What are usance letters of credit?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"<br\/>A usance or deferred letter of credit is a type of letter of credit used often in trade finance whereby the issuing bank must make payment by a preset date. \",\"inLanguage\":\"en-GB\"},\"inLanguage\":\"en-GB\"},{\"@type\":\"Question\",\"@id\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487530232\",\"position\":4,\"url\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487530232\",\"name\":\"Why should SMEs use usance letters of credit?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"<br\/>Cross-border trade can be risky, but using a letter of credit can help facilitate trust in transactions, both during shipping and in the payment stage of the trade.\u00a0<br\/><br\/>Letters of credit are widely recognised by banks worldwide, and using one should help you safely complete cross-border transactions.\",\"inLanguage\":\"en-GB\"},\"inLanguage\":\"en-GB\"},{\"@type\":\"Question\",\"@id\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663319501575\",\"position\":5,\"url\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663319501575\",\"name\":\"What's the difference between a Usance Letter of Credit and a Sight Letter of Credit?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"A usance or a deferred letter of credit (LC) is also known as a time or term LC.<br\/><br\/>Thus, it will be an LC that is payable at a predetermined point once its conditions are fulfilled and the confirming documents are presented.<br\/><br\/>The simplest way to understand a usance or deferred LC is to compare it to a sight LC;<br\/>Sight LCs are a variation where funds are transferred to the supplier once the confirming documents are submitted.<br\/><br\/>\",\"inLanguage\":\"en-GB\"},\"inLanguage\":\"en-GB\"},{\"@type\":\"Question\",\"@id\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663319390031\",\"position\":6,\"url\":\"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663319390031\",\"name\":\"When are usance letters of credit used?\",\"answerCount\":1,\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Usance LCs are generally used when the buyer and seller lack a degree of trust.<br\/><br\/>In order to begin reconciling this trust, both parties must unequivocally agree on the eventual amount to be paid and the interest rate on the product.<br\/><br\/>\",\"inLanguage\":\"en-GB\"},\"inLanguage\":\"en-GB\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"UPDATED: What are usance letters of credit | TFG 2022 Usance LC Guide","description":"A usance letter of credit is payable at a future point. Read our 2020 TFG Letter of Credit Guide on Usance Letters of Credit for Trade.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/","og_locale":"en_GB","og_type":"article","og_title":"Usance letters of credit - what are they? | 2022 TFG Usance LC Guide","og_description":"A usance letter of credit is payable at a future point. Read our 2020 TFG Letter of Credit Guide on Usance Letters of Credit for Trade.","og_url":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/","og_site_name":"Trade Finance Global","article_publisher":"https:\/\/www.facebook.com\/tradefinanceglobal","article_published_time":"2022-07-19T12:26:00+00:00","article_modified_time":"2022-12-12T12:57:14+00:00","og_image":[{"width":1230,"height":526,"url":"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2018\/08\/TEMPLATE_FEATURED-IMAGE-Posts-Articles-News-Wires-1.jpg","type":"image\/jpeg"}],"author":"Marcus Lankford","twitter_card":"summary_large_image","twitter_creator":"@tradefinglobal","twitter_site":"@tradefinglobal","twitter_misc":{"Written by":"Marcus Lankford","Estimated reading time":"9 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#article","isPartOf":{"@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/"},"author":{"name":"Marcus Lankford","@id":"https:\/\/www.tradefinanceglobal.com\/#\/schema\/person\/50945e60c0287b7339b2e70d2ee9eca9"},"headline":"Usance letters of credit – what are they? | 2022 TFG Usance LC Guide","datePublished":"2022-07-19T12:26:00+00:00","dateModified":"2022-12-12T12:57:14+00:00","mainEntityOfPage":{"@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/"},"wordCount":1707,"publisher":{"@id":"https:\/\/www.tradefinanceglobal.com\/#organization"},"image":{"@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#primaryimage"},"thumbnailUrl":"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2018\/08\/TEMPLATE_FEATURED-IMAGE-Posts-Articles-News-Wires-1.jpg","keywords":["deferred","deferred LC","deferred LC guide","deferred letter of credit","LC","letter of credit","letter of credit guide","usance","usance LC","usance letter of credit"],"articleSection":["Articles","Business Loans","For Exporters","Letters of Credit","Stock Finance","Supply Chain Finance","Trade Finance","UK Specialists"],"inLanguage":"en-GB","copyrightYear":"2022","copyrightHolder":{"@id":"https:\/\/www.tradefinanceglobal.com\/#organization"}},{"@type":["WebPage","FAQPage"],"@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/","url":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/","name":"UPDATED: What are usance letters of credit | TFG 2022 Usance LC Guide","isPartOf":{"@id":"https:\/\/www.tradefinanceglobal.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#primaryimage"},"image":{"@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#primaryimage"},"thumbnailUrl":"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2018\/08\/TEMPLATE_FEATURED-IMAGE-Posts-Articles-News-Wires-1.jpg","datePublished":"2022-07-19T12:26:00+00:00","dateModified":"2022-12-12T12:57:14+00:00","description":"A usance letter of credit is payable at a future point. Read our 2020 TFG Letter of Credit Guide on Usance Letters of Credit for Trade.","breadcrumb":{"@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#breadcrumb"},"mainEntity":[{"@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487021948"},{"@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487081186"},{"@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487478976"},{"@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487530232"},{"@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663319501575"},{"@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663319390031"}],"inLanguage":"en-GB","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/"]}]},{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#primaryimage","url":"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2018\/08\/TEMPLATE_FEATURED-IMAGE-Posts-Articles-News-Wires-1.jpg","contentUrl":"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2018\/08\/TEMPLATE_FEATURED-IMAGE-Posts-Articles-News-Wires-1.jpg","width":1230,"height":526,"caption":"Usance Letter of Credit"},{"@type":"BreadcrumbList","@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.tradefinanceglobal.com\/"},{"@type":"ListItem","position":2,"name":"Usance letters of credit – what are they? | 2022 TFG Usance LC Guide"}]},{"@type":"WebSite","@id":"https:\/\/www.tradefinanceglobal.com\/#website","url":"https:\/\/www.tradefinanceglobal.com\/","name":"Trade Finance Global","description":"Transforming Trade, Treasury & Payments","publisher":{"@id":"https:\/\/www.tradefinanceglobal.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.tradefinanceglobal.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-GB"},{"@type":"Organization","@id":"https:\/\/www.tradefinanceglobal.com\/#organization","name":"Trade Finance Global","alternateName":"TFG","url":"https:\/\/www.tradefinanceglobal.com\/","logo":{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/www.tradefinanceglobal.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2020\/04\/cropped-TFG-Logo-scaled-1.jpg","contentUrl":"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2020\/04\/cropped-TFG-Logo-scaled-1.jpg","width":1300,"height":722,"caption":"Trade Finance Global"},"image":{"@id":"https:\/\/www.tradefinanceglobal.com\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/tradefinanceglobal","https:\/\/x.com\/tradefinglobal","https:\/\/www.instagram.com\/tradefinance\/","https:\/\/www.linkedin.com\/company\/trade-finance-global","https:\/\/uk.pinterest.com\/tradefinanceglo\/","https:\/\/www.youtube.com\/tradefinanceglobal"]},{"@type":"Person","@id":"https:\/\/www.tradefinanceglobal.com\/#\/schema\/person\/50945e60c0287b7339b2e70d2ee9eca9","name":"Marcus Lankford","image":{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/www.tradefinanceglobal.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/d5f6215657e778297853092870755448?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/d5f6215657e778297853092870755448?s=96&d=mm&r=g","caption":"Marcus Lankford"},"description":"Marcus Lankford is a Restructuring Advisory Analyst at Kroll. He holds a BA in Economics and Politics, with a core focus on International and Environmental Economics, Political Lobbying and Digital Information at Work.","sameAs":["https:\/\/www.kroll.com\/en","https:\/\/www.linkedin.com\/in\/marcus-lankford-a2aa03175"],"knowsLanguage":["English"],"jobTitle":"Restructuring Advisory Analyst","worksFor":"Kroll","url":"https:\/\/www.tradefinanceglobal.com\/posts\/author\/marcus-lankfordtradefinanceglobal-com\/"},{"@type":"Question","@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487021948","position":1,"url":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487021948","name":"What is a letter of credit?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":" <p>Before we get into usance or deferred letters of credit, let\u2019s first recap what a normal <a href=\"https:\/\/www.tradefinanceglobal.com\/posts\/letters-of-credit-explained-how-can-they-help-your-trading-business-grow-and-how-do-you-apply-for-one\/\">letter of credit<\/a> is.\u00a0If you\u2019re an importer or an exporter, you will probably want your goods and cash to be as safe as possible during a trade transaction.<\/p>","inLanguage":"en-GB"},"inLanguage":"en-GB"},{"@type":"Question","@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487081186","position":2,"url":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487081186","name":"How does a letter of credit work?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"<br\/>Let\u2019s suppose that an importer wants to purchase goods from an exporter in a trade transaction. To secure the transaction using a letter of credit, the importer can apply for a letter of credit from an \u2018issuing bank\u2019 (so called because this is the bank that will <em>issue<\/em> the letter of credit).","inLanguage":"en-GB"},"inLanguage":"en-GB"},{"@type":"Question","@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487478976","position":3,"url":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487478976","name":"What are usance letters of credit?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"<br\/>A usance or deferred letter of credit is a type of letter of credit used often in trade finance whereby the issuing bank must make payment by a preset date. ","inLanguage":"en-GB"},"inLanguage":"en-GB"},{"@type":"Question","@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487530232","position":4,"url":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663487530232","name":"Why should SMEs use usance letters of credit?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"<br\/>Cross-border trade can be risky, but using a letter of credit can help facilitate trust in transactions, both during shipping and in the payment stage of the trade.\u00a0<br\/><br\/>Letters of credit are widely recognised by banks worldwide, and using one should help you safely complete cross-border transactions.","inLanguage":"en-GB"},"inLanguage":"en-GB"},{"@type":"Question","@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663319501575","position":5,"url":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663319501575","name":"What's the difference between a Usance Letter of Credit and a Sight Letter of Credit?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"A usance or a deferred letter of credit (LC) is also known as a time or term LC.<br\/><br\/>Thus, it will be an LC that is payable at a predetermined point once its conditions are fulfilled and the confirming documents are presented.<br\/><br\/>The simplest way to understand a usance or deferred LC is to compare it to a sight LC;<br\/>Sight LCs are a variation where funds are transferred to the supplier once the confirming documents are submitted.<br\/><br\/>","inLanguage":"en-GB"},"inLanguage":"en-GB"},{"@type":"Question","@id":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663319390031","position":6,"url":"https:\/\/www.tradefinanceglobal.com\/posts\/usance-letters-of-credit-what-are-they\/#faq-question-1663319390031","name":"When are usance letters of credit used?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Usance LCs are generally used when the buyer and seller lack a degree of trust.<br\/><br\/>In order to begin reconciling this trust, both parties must unequivocally agree on the eventual amount to be paid and the interest rate on the product.<br\/><br\/>","inLanguage":"en-GB"},"inLanguage":"en-GB"}]}},"featured_image_url":"https:\/\/www.tradefinanceglobal.com\/wp-content\/uploads\/2018\/08\/TEMPLATE_FEATURED-IMAGE-Posts-Articles-News-Wires-1.jpg","primary_category":"Articles","secondary_category":"Letters of Credit","_links":{"self":[{"href":"https:\/\/www.tradefinanceglobal.com\/wp-json\/wp\/v2\/posts\/9074","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.tradefinanceglobal.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tradefinanceglobal.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tradefinanceglobal.com\/wp-json\/wp\/v2\/users\/394"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tradefinanceglobal.com\/wp-json\/wp\/v2\/comments?post=9074"}],"version-history":[{"count":12,"href":"https:\/\/www.tradefinanceglobal.com\/wp-json\/wp\/v2\/posts\/9074\/revisions"}],"predecessor-version":[{"id":74647,"href":"https:\/\/www.tradefinanceglobal.com\/wp-json\/wp\/v2\/posts\/9074\/revisions\/74647"}],"acf:term":[{"embeddable":true,"taxonomy":"category","href":"https:\/\/www.tradefinanceglobal.com\/wp-json\/wp\/v2\/categories\/2129"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tradefinanceglobal.com\/wp-json\/wp\/v2\/media\/67077"}],"wp:attachment":[{"href":"https:\/\/www.tradefinanceglobal.com\/wp-json\/wp\/v2\/media?parent=9074"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tradefinanceglobal.com\/wp-json\/wp\/v2\/categories?post=9074"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tradefinanceglobal.com\/wp-json\/wp\/v2\/tags?post=9074"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]},"reach_limit_for_guest":true}