A letter of credit in which the buyer is allowed to reuse the credit after the letter is drawn down by the seller and the bank is reimbursed is known as a:

Question

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A revolving letter of credit allows the buyer to reuse the credit after the seller has been paid and the bank is reimbursed. This can be useful for ongoing business relationships or for frequent purchases from a specific seller. Option A, transferable letter of credit, involves the original beneficiary transferring some or all of the proceeds to a third party, while option C, back-to-back letter of credit, involves two separate but related transactions. Option D, letter of warranty credit, is not a recognized type of letter of credit.

A Letter of Credit in Which the Buyer Is Allowed