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A letter of credit (lc), also known as a documentary credit or bankers commercial credit, or letter of undertaking (lou), is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods. A letter of credit is a document issued from financial institutions, using a beneficiary, mostly to pay for import/export types of trade finance. A letter of credit (lc) is a document issued mostly by a banks, used primarily in trade finance, which usually provides an irrevocable payment undertaking. An lc is a promise written on a legal document that comes from a bank with a promise to pay the holder if the holder fulfills certain obligations.