Credit Letter of Business Transaction
A Credit letter of any business transaction is usually issued by a bank or similar financial institutions to assist in safeguarding the interests of all parties involved in any transaction, generally a buy and sell agreement. The letter of Credit implies the financial institution’s active role in assuring the seller of the buyer’s good intentions on the transaction. Getting the consent of all parties involved is vital. The task of ensuring that all the necessary signatures are in place is of the financial institutions.
This can be considered as a legal document and therefore should be treated with utmost importance. It is a highly formal letter sent from the bank to the concerned parties. These letters should mention all the details explicitly i.e., The dates, bank balances, terms and conditions and lastly the amount should be written in bold and underlined to stress their importance. Make sure you also attach a photocopy of relevant bank statements and documents as well.
First National Commerce Bank,
433 Chenoweth Drive
Nashville, TN 37204
March 22, 2010
4413 Woodlawn Drive
Milwaukee, WI 53219
Re: Irrevocable Credit Letter No#: H002335
In the account of the initiation of your recent financial ventures, Herewith, First National Commerce Bank opens this irrevocable credit in your favor on the amount of Seventy thousand dollars ($70,000), payable on site according to your request with your copy of the following statement:
‘Hudson Enterprise has the right to claim the amount drawn by the agreed terms and conditions as stated in the Contract by the exporter.’
This transaction was consented to further your business with the list of exporters you have provided us with. Sir, in the past ten years of doing financial services with your company we have been more than happy. You have always paid all pending loans not only on time but often before time as well. With each passing year, the value of your collateral only increases which gives us the assurance of doing more beneficiary business with you in the future.
This Credit letter of business shall be valid through May 30, 2012, which will not be automatically extended unless the Issuing Bank provides a written notice at the request of the parties involved. This notice is considered served upon your receipt. We request you to kindly adhere to the deadline.
This Credit letter of business is issued by the Standard Customs and Practice for Documentary Credits, 2008 Version National Chamber of Commerce Publication, No. 590.
For any further assistance feel free to contact. To discuss the terms of this statement, we will be organizing a meeting with you and our relationship manager on any date and time suggested by you. Best of luck.
First National Commerce Bank