Letters of Credit
A Flanagan State Bank letter of credit is a perfect fit when you have a business transaction that requires you to guarantee a payment or service (such as delivery of goods).
Our letters of credit can be especially helpful in international commerce. Interest accrues only when an advance is issued at the request of the beneficiary.
- Ideal to guarantee payments on large purchases
- Can also be used to guarantee a service
- Typically issued for a 1-year term or less
- Fee is based on face value amount
- Interest accrues only when beneficiary requests an advance
- Can replace need for an insurance company performance bond
- Performance Letter of Credits available as a guaranty that a business will perform a specific task within a certain time period.
- Standby Letter of Credits are available as a guaranty that a business will pay a vendor on a timely basis pursuant to the terms negotiated between the business and their vendor.