Letters of Credit (LOC)

When embarking upon a new business relationship or a very large purchase transaction, there are usually formalities involved. As a bank that works hard to understand our customers, we are here to provide the accreditation you need to start off on solid ground.

Rather than procure a company performance bond from your insurance company, a VSB Letter of Credit can be used to back your value or to guarantee a particular service.

Summary
  • Provides guarantee on payments of large purchases or contractual agreements to third parties
  • Helpful when embarking upon new business relationships
  • Can also be used to guarantee a service
  • Terms are set by third party
  • Principal generally due on demand
  • No principal balance exists unless payment is required under the terms and conditions of the letter
  • Can replace need for insurance company performance bond
  • Fee is based on face value amount
  • Interest accrues only if beneficiary requests an advance

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