How to Obtain an Irrevocable Letter of Credit
- 1). Contact your business bank. Call or visit your business banker to let them know you need to obtain a letter of credit that is irrevocable. You need to provide details to the banker, including the name, address and contact information for the selling business, as well as the terms of the agreement.
- 2). Deposit the amount of the payment in a bank account. Before the banker issues the irrevocable letter of credit, he or she requires that you deposit the amount for the shipment in an account. The account is generally separate from your standard business checking or savings account and is held until the proof of shipment comes in from the seller and the banker releases the money.
- 3). Obtain a copy and send a copy to the seller. The banker typically has you sign an agreement or sign the letter of credit to acknowledge your commitment to pay for the shipment. Be sure to retain a copy of the letter of credit for your records in addition to the copy the banker sends to the seller.