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Sight Letter of Credit - Explained

What is a Sight Letter of Credit?

Written by Jason Gordon

Updated at July 22nd, 2021

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Table of Contents

What is a Sight Letter Of Credit?

What is a Sight Letter Of Credit?

A sight letter of credit is a business document that traders use to verify the payment for goods and services. 

  • Read more about how a Letter of Credit works.

The letter of credit is payable as soon as the necessary documents are submitted to the paying bank. 

Basically, the sight letter of credit means that payment is due on demand.

A company that offers a sight letter of credit enters into a commitment that it will pay the sum of money involved in the transaction as long as the specifications in the letter of credit are satisfied. 

This generally means that the bank must receive all the complying documents (such as a Bill of Lading) from a seller of goods. 

Once the issuing bank and the buyer verify and accept the documents, payment of the letter of credit is made. 

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