Guarantee to an exporter that the importer of his goods will pay immediately for the goods ordered by him, is known as

Guarantee to an exporter that the importer of his goods will pay immediately for the goods ordered by him, is known as Letter of Credit (L/C). A Letter of Credit, also known as LC or Documentary Credit, is a commonly used instrument for effecting payment between a buyer and a seller. It can be a vital part of mitigating a seller's risk of payment in either international trade or domestic business.