TransferableLettersCredit

Letter of Credit transfers are typically used by brokers or middlemen because they allow the beneficiary’s bank to transfer all or part of the credit to a third party. A potential risk is that the documents will reveal the identity of the supplier and ultimate buyer to one another.

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Transferable Letters of Credit

A Transferable Letter of Credit enables the exporter or beneficiary (you) to give instructions to the paying bank (us) to make some or all of the credit available to a third party. It is primarily used by brokers and middlemen, rather than the ultimate suppliers.

A Transferable Letter of Credit is simpler and more reliable than Back-to-Back Letter of Credit arrangements.

The following diagrams and descriptions outline the issuance and transfer of a letter of credit, assuming that you are the middleman.

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Transferable Letters of Credit

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Standby Letters of Credit

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