A revolving letter of credit is issued by banks or financial institutions to the clients. A single letter of credit used for multiple shipments over a long period is known as a revolving letter of credit. If the buyer and seller are trading with the same commodity regularly over a long period of time, then they may choose to work with a revolving letter of credit instead of issuing the letter of credit for every shipment. It revolves either with the value or with time. In a former case, letter of credit is reissued automatically when the credit amount is utilized fully. In the latter case, the amount is available in fixed installments.
A revolving letter of credit is written to mentioning the detail about the about the revolving credit account. The sample, provided below, contains all information.
Sample Revolving Letter of Credit
From
Ferdinand Marcos
Credit Officer
Dupont Bank
5438 Jarred Street
Raleigh, NC 27604
Aug 13, 2014
To
Jeremy Myers
2562 Gorham Street
London, ON N0N 0N0
Dear Sir,
Re: Revolving Credit Facility
On behalf of DUPONT BANK, I am pleased to present to you the availability of a revolving credit facility according to the listed terms and conditions below:
BORROWER: Jeremy Myers
CREDIT FACILITY: Revolving Credit Line of maximum $50,000.
PURPOSE: Home Renovation
INTEREST: 4.5% per annum of loan amount with a monthly computation for overdue interest, payable by the first of every month of the Credit period.
TERM AND MATURITY: The Credit is repayable on demand.
AVAILMENT: August 15, 2014
SECURITY: One guarantor required.
AFFIRMATIVE COVENANTS: With the Credit loan, the Borrower is obliged to fulfill the following, until the Credit is paid fully.
a) Borrower will have to submit annual financial statements to the Lender
NEGATIVE COVENANTS: With the Credit loan, the Borrower is obliged not to do the following without the Lender’s prior consent in writing.
a) Borrower may not execute any other Credit facility with another financial agency.
Please call now to enjoy the offered Credit facility immediately.
Yours sincerely,
Ferdinand Marcos
Credit Officer
Dupont Bank
Given Below are a few credit letter samples for a clearer Idea.
Letter of Request Credit Note from Supplier
Standby Letter of Credit
The standby letter of credit is issued by banks or financial institutions.
Sight Letter of Credit
A letter of credit that is payable once it is presented along with the necessary documents.
Documentary Letter of Credit
Documentary letter of credit is a well-known fact that a credit facility is important, especially for the people involved in business activities.
Credit Refusal Letter
A credit refusal letter is sent from one party to another during the course of a business, so as to inform the recipient that his/her request for a credit has been denied.
Credit Reference Letter
A credit reference letter is issued by a bank or any other financial institutions.
Credit Inquiry Explanation Letter Template, Example