Letter of Credit Calculator
A letter of credit (LC) gives your overseas supplier a bank-backed payment guarantee. Costs are typically a percentage of the trade value per quarter the LC is outstanding.
Your inputs
Estimated cost
Issuance fee
£7,500.00
Admin & SWIFT fees
£350.00
Total LC cost
£7,850
Effective cost of trade
0.78%
Assumptions used in this calculator
- Most banks charge issuance fees in quarterly blocks, rounded up.
- Amendments, discrepancies and negotiation fees may add to the total.
- Sight LCs are typically cheaper than usance (deferred-payment) LCs.
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Calculator questions
When should I use a letter of credit?
When trading with a new overseas supplier, in a higher-risk country, or when your supplier requires payment security before shipping.
How long does it take to arrange an LC?
Typically 3-7 working days through specialist trade finance lenders, depending on the complexity of the documentation.
How to get a letter of credit through Spark Finance
- 1
Complete the free calculator above to understand your estimated monthly repayment.
- 2
Click 'Check your eligibility' to start your full application in under five minutes.
- 3
Spark Finance approaches multiple lenders and presents you with competing offers to compare.
- 4
Accept your preferred offer and funds are typically released within 24-72 hours.
Learn more about a letter of credit
The Complete Guide to Letters of Credit for UK Businesses (2026)
May 22, 2026 · 12 min read
Enabling International Trade Through a Letter of Credit Solution: Case Study
Jul 2, 2026 · 5 min read
How Letters of Credit Protect UK Importers from Supplier Risk
May 3, 2026 · 6 min read