Acceptance Credit Acceptance Credit
A letter of credit that provides for payment by means of a time draft. Acceptance and payment of the draft are guaranteed by the bank issuing the credit only if the documents presented under the credit conform to the L/C. Acceptance credits are advantageous because the beneficiary (the seller) can receive immediate payment by having the draft discounted, while the applicant's (buyer's) obligation to pay is deferred until the maturity of the draft.
See related terms: