A better way to make a guarantee
A Letter of Credit guarantees your payment on a commercial transaction or performance on a construction project, backed by the credit of LANB.
We offer two types of Irrevocable Letters of Credit:
Performance Letter of Credit
Issued to ensure to the beneficiary (often city or county government) that funds are available for work to be completed as contracted.
Financial Letter of Credit
Issued to facilitate payments related to a commercial transaction involving shipment of goods.
A letter of credit serves as a financial guaranty on the borrower’s behalf for a third party. It provides a greater level of comfort to the third party that they will be paid for services/goods provided in the transaction.
A letter of credit can typically be issued for up to 12 months.
The letter of credit is supported by a promissory note drawn between the Bank and the borrower. The terms of the promissory note will state the terms of repayment should the letter be drawn upon.
The letter of credit fee is typically is 1% of the letter amount.
Need a Letter of Credit?
Letters of credit are not FDIC insured.