Documentary credit

A Documentary Credit (“D/C”) also known as Letter of Credit (“L/C”) is a method of payment where the buyer’s bank guarantees payment to the seller with the condition that the seller has to fulfil the terms specified in the L/C. 

Benefits for the buyer

  • The buyer will improve its working capital since payment will be made after the goods have been shipped 

  • The buyer might get longer credit terms from the seller 

  • The buyer can be certain that the seller will only get paid after they have met the terms of the L/C 


The buyer applies for an L/C, either by filling in the application form or electronically in Trade Finance Global (Nordea's e-solution for Trade Finance transactions). 

After credit approval, the bank issues the L/C in favour of the seller.

 L/C terminology

Get in touch 

For more information about how we can support your business contact your Nordea adviser.