Deferred reimbursement letter of credit (L/C),

Definition of Deferred reimbursement letter of credit (L/C):

1. Arrangement under which the bank issuing a L/C also finances it. The bank pays the beneficiary upon presentation of the required documents but delays charging that amount to the applicant until a future date. Its objective usually is to allow the applicant a period long enough to resell the financed goods.