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Aside from trade credit insurance, there are other alternatives to a letter of credit. Those include: Purchase order financing: Purchase order financing provides you cash up front to complete a purchase order. Under this agreement, a financing company pays your supplier for goods you need to fulfill a purchase order.
A revocable letter of credit is one which can be cancelled or amended by the issuing bank at any time and without prior notice to or consent of the beneficiary. From the exporter's point of view such LCs are not safe.
However, this statement can be interpreted as ?LC cannot be cancelled solely by the issuing bank. However, it can be done if a written declaration is submitted to the issuing bank by the beneficiary(and by the seller depending upon the contract) regarding the cancellation of the LC.
An irrevocable letter of credit is a guarantee from a bank, issued in the form of a letter. It creates an agreement where the buyer's bank agrees to pay the seller as soon as certain conditions of the transaction are met.
Courts have overwhelmingly held that an LC and its proceeds are not property of an Applicant's bankruptcy estate. As an independent undertaking between the Issuer and the Beneficiary, the LC payment is by the Issuer, not by the bankrupt Applicant.