Delayed Payment Credit

Summary of Delayed Payment Credit

A letter of CREDIT (read this and related legal terms for further details) under which the beneficiary submits his draft after having supplied shipping papers or other documents. This form of letter of credit usually provides that a sight draft will be presented a stipulated number of days after submission of the shipping papers. This type of instrument is commonly used only in conjunction with sales where the seller provides financing of nine months or more.

(Main Author: William J. Miller)