Letters of Credit

A letter of credit used to be a solid handshake, but in today’s market you’ll need documentation. Pioneer Bank provides letters of credit with extra credential support to enhance your possibilities—providing guarantees on payments of large purchases to third parties. This is especially useful when it comes to international commerce. Letters of Credit can replace the need for costly insurance company performance bonds and can also be used to guarantee a service. Typically, a letter of credit is issued for a one-year term or less but are easily renewed. A fee is based on the face value amount and interest accrues only if Pioneer Bank makes a payment to the beneficiary on your behalf.

• Provides guarantee on payments of large purchases to third parties
• Can replace need for costly insurance company performance bond
• Can also be used to guarantee a service
• Typically issued for 1-year term or less
• Terms easily renewed
• Fee is based on face value amount
• Interest accrues only if we must make payment to beneficiary on your behalf