Letter of Credit Sample
A Letter of Credit (L/C) is a bank guarantee of payment. The issuing bank promises to pay the seller upon presentation of compliant documents. This sample shows the L/C format and document requirements.
L/C Key Terms Reference
L/C Type
Irrevocable / Revocable / Confirmed / Unconfirmed / Transferable / Back-to-Back *
Applicant (Buyer)
Company name, address *
Beneficiary (Seller)
Company name, address — must match exactly *
Issuing Bank
Bank name, SWIFT code, branch *
Advising Bank
Seller's bank, SWIFT code
L/C Amount
Amount + currency + tolerance (e.g., USD 50,000 +/- 5%) *
Expiry Date & Place
Date + location (usually beneficiary's country) *
Latest Shipment Date
Must ship on or before this date *
Port of Loading
As per contract
Port of Destination
As per contract
Incoterms
FOB / CIF / CFR + named place *
Partial Shipments
Allowed / Not allowed
Transshipment
Allowed / Not allowed
Period of Presentation
Documents must be presented within X days after B/L date (typically 15-21 days)
Required Documents Checklist
| # | Document | Copies | Special Requirements |
|---|
| 1 | Signed Commercial Invoice | 3 orig + 3 copies | Must indicate L/C number |
| 2 | Full Set of Clean On Board Ocean B/L | 3/3 originals | Consigned "To Order of [Issuing Bank]" |
| 3 | Packing List | 3 copies | Detailed carton-by-carton |
| 4 | Certificate of Origin | 1 orig + 2 copies | Issued by CCPIT or Customs |
| 5 | Insurance Policy/Certificate | 2 orig + 2 copies | If CIF: 110% of invoice value, all risks |
| 6 | Inspection Certificate | 1 orig + 2 copies | SGS, BV, or as specified |
| 7 | Beneficiary Certificate | 1 orig + 2 copies | Various certifications as required |
L/C Discrepancies — Top Reasons for Rejection
- Late shipment — B/L date after the latest shipment date in the L/C
- Late presentation — Documents presented after the allowed period (typically 21 days after B/L)
- B/L consignee error — "To Order" instead of "To Order of [Bank]" or vice versa
- Description mismatch — Goods description on invoice/B/L doesn't match L/C word-for-word
- Amount discrepancy — Invoice amount exceeds L/C amount or tolerance
- Missing documents — One of the required documents not presented
- Insurance shortfall — Insurance value less than 110% of CIF value
- Port mismatch — POL/POD on B/L doesn't match L/C
⚠ Critical: Under UCP 600 (Uniform Customs and Practice for Documentary Credits), banks deal in DOCUMENTS, not goods. Even a single letter discrepancy can cause the bank to refuse payment. Always have your documents checked by your bank or an L/C specialist before presentation.
📝 Pro Tip: Request the L/C advisory review from your advising bank BEFORE shipping. The bank can identify problematic clauses that could prevent payment. Cost: $50-200, but can save you from losing the entire shipment value.
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