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Sight Letter of Credit - Definition

Written by Jason Gordon

Updated at December 7th, 2020

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What is a Sight Letter Of Credit?

A sight letter of credit is a business document that traders use to verify the payment of goods and services. The goods are payable as soon as other necessary documents are submitted along with it. Basically, the sight letter of credit means is 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 from a business dealer. Once the issuing bank and the buyer verifies and accepts the documents, it is then that payment is released. 

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