When a Revolving LC Keeps Turning — and When It Stops Intro: Every once in a while, a question pops up that seems simple but opens a door into the practical logic behind trade finance. This one came from Max, who was planning to use a revolving letter of credit for regular shipments and wanted to understand how the “cumulative” and “automatic” features actually work in real life. Question from Max … Read More
Revolving Letters of Credit: Key Considerations and Hidden Risks Revolving letters of credit (RLCs) sound attractive for handling multiple shipments under one instrument. In theory, they save time and paperwork; in practice, they raise complex issues for both banks and traders. Before opening an RLC, it’s worth understanding how they work, the key points to watch out for, and why they are rarely used today. _______ QUESTION What are … Read More
CUMULATIVE REVOLVING LETTER OF CREDIT QUERY Dear Nguyen Huu Duc, Thank you for your blog, it is a very useful one. I want to propose to a customer a revolving LC. The customer is big and has enough money to pay. The LC would be 1,600,000 USD per month and 1,000,000 objects per month for a period of one year. The LC would be cumulative … Read More