Revolving Letter of Credit

A Revolving Letter of Credit is a financial instrument that automatically reinstates its original amount once it is drawn down. It supports businesses engaged in ongoing transactions.

Key elements include:

1. Automatic Reinstatement: The credit limit resets to its initial value after use.
2. Usage Scope: Suitable for companies with regular, recurring trade dealings.
3. Financial Institutions: Issuers typically include banks like JPMorgan Chase, HSBC, and Citibank.
4. Beneficiaries: Common recipients are exporters engaged in continuous shipping of similar goods.

Examples:

• Exporters supplying weekly shipments.
• Importers consistently ordering identical products.

Revolving Letters of Credit facilitate smooth, uninterrupted trading operations.