What is meant by payment term LC?

A payment term LC, or Letter of Credit, is a financial document issued by a bank on behalf of a buyer, guaranteeing payment to a seller upon the fulfillment of specified conditions. It serves as a secure method of payment in international trade, ensuring that the seller receives payment as long as they provide the required documentation, such as shipping details and invoices. This reduces the risk for both parties, as the buyer can ensure that the goods are delivered as promised before payment is made.