Deferred Payment

From Open Risk Manual


Deferred Payment. It is a payment at a set time after the shipment or the presentation of shipping documents, as opposed to immediately or at sight.

A distinction is drawn between a letter of credit that is available for deferred payment and one that is available for acceptance of time drafts in that no drafts are involved under a deferred payment letter of credit. Without accepted drafts, the beneficiary's ability to sell, or discount, its right to payment to another lender or investor is restricted.