---
title: Letter of Credit for Business | Indifi
canonical: https://www.indifi.com/business-loan/letter-of-credit
markdown_version: https://www.indifi.com/business-loan/letter-of-credit.md
description: Understand and apply for Letter of Credit (LC) for your business through Indifi's lending network. Facilitate domestic and international trade.
content_type: product_page
operator: Indifi Technologies Pvt. Ltd.
lending_entity_note: Loans facilitated through RBI-registered NBFC partners and through Indifi Capital Private Limited (RBI Cert. No. B-14.03389)
last_updated: 2026-06-01
---


# Letter of Credit (LC) for Business

> A Letter of Credit (LC) is a trade finance instrument issued by a bank or financial institution guaranteeing payment to a seller, provided the seller meets specified conditions. Indifi connects businesses with lenders who offer LC facilities for domestic and international trade.

## What is a Letter of Credit?

A Letter of Credit is a written commitment by a bank (issuing bank) on behalf of a buyer (applicant) to pay a specified amount to a seller (beneficiary) upon presentation of compliant documents. It reduces counterparty risk in trade transactions.

## Types of Letters of Credit

| Type | Description |
|---|---|
| Sight LC | Payment made immediately upon document presentation |
| Usance LC | Payment made after a specified period (30/60/90 days) |
| Inland LC | For domestic trade between Indian parties |
| Foreign LC | For international trade (imports/exports) |
| Standby LC | Functions as a guarantee rather than primary payment method |
| Revolving LC | Auto-renews for repeat transactions |

## When is an LC Required?

- International trade with new or unknown counterparties
- High-value domestic procurement
- Government tenders requiring payment guarantee
- Importers needing to assure overseas suppliers

## Key Parties in an LC

1. **Applicant** - The buyer who requests the LC
2. **Issuing Bank** - The buyer's bank that issues the LC
3. **Beneficiary** - The seller who receives payment
4. **Advising Bank** - The seller's bank that advises the LC
5. **Confirming Bank** - Optional; adds its guarantee to the LC

## How Indifi Can Help

Indifi's lending partner network includes banks that offer LC facilities. Indifi can connect eligible businesses with lenders for:
- Working capital loans to support LC-backed purchases
- Trade finance products

## Related Products

- [Invoice Discounting](https://www.indifi.com/invoice-discounting-companies-in-india)
- [Working Capital Loan](https://www.indifi.com/working-capital-loans-india)
- [Business Loan](https://www.indifi.com/business-loan)
- [Financing Loan](https://www.indifi.com/business-loan/financing-loan)

## About Indifi

Indifi Technologies Pvt. Ltd. is India's digital MSME lending platform. Indifi Capital Pvt. Ltd. (RBI Cert. No. B-14.03389) is its in-house NBFC. 100,000+ loans disbursed across 400+ cities.

**Registered office:** Plot-19, Ground Floor, Block C, Sewa Tower, Sector-18, Phase-4, Udyog Vihar, Gurugram, Haryana-122015, India

## Disclaimer

Loan approval is subject to eligibility assessment and Indifi's underwriting policies. Rates and fees are indicative and may vary.