Trade Finance
LC At Sight Meaning: 100% Sight vs Usance 30/60/90 (2026)
Sight LC vs usance LC — what sight and usance mean, usance period in LC, difference between sight and usance LC, and what LC 60/90/120 days at sight means for cash flow.
Why LC payment terms matter
A letter of credit is a bank’s payment promise, but the promise has a timing attached to it. The payment terms of an LC decide whether you are paid at sight — as soon as you present compliant documents — or 60, 90 or 120 days later. For an exporter, that difference is weeks or months of working capital; for an importer, it is free credit from a bank-guaranteed instrument.
Getting the terms right — and knowing how to finance the gap when you accept a long tenor — is one of the most practical skills in trade. Below: sight LC vs usance LC difference, what usance period means, and what LC at sight 60/90/120 days means in practice.
Sight LC vs usance (time) LC — difference at a glance
| Feature | Sight LC (LC at sight) | Usance LC (time LC, term LC) |
|---|---|---|
| Also called | Sight letter of credit, LC at sight | Usance letter of credit, time LC |
| Payment timing | On presentation of compliant documents — payable at sight | At usance period — e.g., 60/90/120 days after B/L or after sight |
| Cash flow for exporter | Paid within days of shipment | Cash locked until maturity (or discounted) |
| Credit for importer | None — pays at once | Deferred payment (60/90/120 days) on bank-guaranteed terms |
| Documents | Sight bill (demand draft) | Usance bill (time draft) — accepted by bank |
| Financing need | Low | High — usually bridged by LC discounting |
| Risk for exporter | Lowest | Tenor risk — manage via discounting |
Searchers ask the same thing many ways — sight lc vs usance lc, sight vs usance lc, usance lc vs sight lc, sight and usance lc difference — the table above answers all of them.
What is sight LC? What is usance LC? Usance meaning
Sight LC meaning: LC payable at sight — issuing bank pays immediately on compliant presentation. No credit period. This is LC at sight payment terms or LC at sight means immediate payment.
Usance LC meaning: LC payable at a fixed usance period after sight or B/L date — e.g., usance 60 days, usance 90 days. Also called usance letter of credit, time LC or term LC. The exporter ships now, bank pays at maturity. Usance vs sight LC is simply immediate vs deferred bank payment.
Usance meaning in trade finance = deferred payment period granted under a time draft. Usance payment = payment at tenor, not at sight.
Usance period in LC — meaning and how it is calculated
Usance period in LC (also searched as usance period, usance period meaning, what is usance period in LC) is the credit period the exporter grants the importer under the LC. It is counted from a defined event stated in the LC:
- From bill of lading date — most common: LC at sight 60 days = 60 days after B/L date.
- From presentation / acceptance date — e.g., 90 days after sight or 90 days after acceptance of usance bill.
- From shipment date — less common, but LC will state it explicitly.
Lead time + usance period = total days cash is tied. Example: 30 days lead time (production + transit) + 90-day usance period = 120 days from order to payment unless you discount. Always confirm the start event in LC field 42a/42c — it changes the maturity date.
What 60/90/120 days means — LC at sight 60 days meaning
| LC term | What it means | Exporter paid | Example |
|---|---|---|---|
| 100% LC at sight | Fully payable at sight — no usance period | Within days of presentation | 100% LC at sight = immediate payment, not deferred |
| LC at sight / sight LC | Payable at sight on compliant presentation | Within days of presentation | LC at sight payment terms — no credit |
| LC 30 days / LC at sight 30 days | Usance 30 days from B/L or sight | 30 days after B/L (or discounted earlier) | 30 days after sight / after B/L date |
| LC 60 days / LC at sight 60 days | Usance 60 days from B/L or sight | 60 days after B/L (or discounted) | 60 days LC means 60-day buyer credit |
| LC 90 days | Usance 90 days from B/L or sight | 90 days after B/L (or discounted) | LC 90 days payment terms = 90-day deferral |
| LC 120 days | Usance 120 days from B/L or sight | 120 days after B/L (or discounted) | 120 days LC — longest standard tenor |
LC at sight 60 days meaning vs LC at sight payment terms: the first is usance (pay 60 days after sight/B-L), the second is true sight (pay immediately). The phrase 100% LC at sight means fully payable at sight, not deferred. LC 60 days vs LC 90 days is simply how long the importer’s bank-guaranteed credit lasts — every extra 30 days is another month of working capital locked.
Sight bill and usance bill — DA vs DP
A sight bill (demand draft) is payable at sight — matches sight LC. An usance bill (time draft) is payable at a future date — e.g., 60 days after sight — matches usance LC. The bill type decides when the bank’s payment obligation matures.
Alongside the tenor, the LC specifies how documents are released. Under DP (documents against payment), the buyer pays before receiving documents — tight and exporter-friendly, used with sight LC. Under DA (documents against acceptance), the buyer accepts the usance bill and takes documents, with payment at maturity — this is what makes 60/90/120 day tenors work.
As an exporter, DA on a long tenor means you hand over goods against a promise to pay later. That promise is the LC, and it can be discounted — but only if your buyer’s market and issuing bank support it.
Bridging the gap: LC discounting for 60/90/120 day tenors
When you accept a 60/90/120 day tenor, you do not have to wait it out. LC discounting lets you sell the usance LC after presentation: a financier advances the value now, at a discount, and is repaid by the issuing bank at maturity. The exporter gets cash in days; the importer keeps the full tenor. Usance LC payable at sight means you are paid at sight by the discounter, while the issuing bank still pays at maturity.
Pricing for LC discounting is driven by the issuing bank’s standing and the buyer country risk — indicative discounts run around 7–13% p.a. ⚠️ depending on the LC. A strong issuing bank means a cheaper discount, which is why checking your buyer country and asking for a bank with a good standing both pay off.
UCP 600 and documentary compliance
Every LC operates under UCP 600, the ICC’s uniform rules for documentary credits. Banks examine documents strictly against the LC terms — amounts, descriptions, dates, ports, incoterms, and whether transshipment is allowed. A single discrepancy can delay or stop payment, and on a usance LC it can also postpone the start of your usance period.
The practical rule: build the document set exactly to the LC before presentation, and self-check it. Clean documents are what make both the sight payment and the discounting transaction fast and cheap.
Practical tips for negotiating LC tenors
- Match the tenor to your real working capital cycle — do not accept 120 days you cannot fund even with discounting.
- Check your buyer’s market for LC discounting coverage before you agree to 60/90/120 days.
- Negotiate the start event: a tenor from B/L date is standard; from presentation/acceptance starts later and costs you days.
- Ask for the buyer’s bank name up front — a stronger issuing bank means cheaper discounting.
- Build document compliance in from the start; discrepancies cost you both time and fees on sight and usance LCs.
- Quote LC at sight vs LC 30/60/90 days with the discounting cost built in — price the credit you are granting.
Check which payment terms you can safely accept
Before agreeing to 60, 90 or 120-day terms, see whether your buyer's LC can be discounted and at what coverage.
Check buyer financingFrequently asked questions
What is a sight LC? Sight LC meaning?
A sight LC (sight letter of credit) is an LC payable at sight — the issuing bank pays the exporter immediately upon presentation of compliant documents. There is no credit period. Also called LC at sight payment terms.
What is usance LC? Usance LC meaning?
A usance LC (also called time or term LC, usance letter of credit) is an LC payable at a fixed usance period after presentation — typically 30/60/90/120 days from bill of lading date or sight. The exporter ships now, bank pays at maturity. That gap is financed via LC discounting.
What is usance period in LC? Usance period meaning?
Usance period in LC is the credit period granted to the importer — e.g., 60, 90 or 120 days — measured from a defined event (usually B/L date or presentation date). An LC at sight 60 days means bank pays 60 days after that event, not immediately. It defines when the sight obligation matures.
What is the difference between sight LC and usance LC?
Sight LC = paid at presentation of compliant documents. Usance LC = paid at tenor (60/90/120 days after B/L or presentation). Sight = fastest for exporter, no buyer credit. Usance = buyer gets deferred bank-guaranteed credit, exporter waits or discounts the LC. Table below compares timing, cash flow, DA vs DP and financing need.
What does LC at sight 60 days, 90 days, 30 days mean? LC 60/90 days payment terms?
LC at sight 60 days (LC 60 days) = usance 60 days from B/L date — bank pays 60 days after B/L if compliant, not at sight. Same for LC 90 days / 120 days / 30 days — the number is the credit period. LC 30 days at sight means 30 days after sight or B/L. LC 60 vs 90 days is simply length of buyer credit — every extra 30 days locks more working capital.
What is sight bill and usance bill?
A sight bill (demand draft) is payable at presentation. An usance bill (time draft) is payable at tenor (e.g., 60 days after sight). Under LC, sight LC uses sight bill, usance LC uses usance bill accepted by the bank.
What is DA vs DP in LC?
DP = documents against payment (buyer pays before documents released). DA = documents against acceptance (buyer accepts usance bill and gets documents, pays at maturity). DP matches sight terms; DA matches usance tenors.
What is lead time and usance period in LC?
Lead time is production + shipping time before presentation. Usance period is the credit period after presentation (e.g., 60 days from B/L). Together they define total days your cash is tied up — lead time + usance tenor = working capital gap.
What is 100% LC at sight meaning?
100% LC at sight means the full LC amount is payable immediately on compliant presentation — no usance period. Contrast LC at sight 60 days, which means pay 60 days after B/L or sight. 100% signals fully sight, not partially deferred.
What is 30 days LC means?
30-day LC means 30-day usance from B/L or sight date — exporter paid 30 days after B/L unless the LC is discounted earlier for immediate cash.
What is usance letter of credit payable at sight?
Usance LC payable at sight is a confusing phrase — it means the usance bill is payable at sight to the discounting bank after the exporter discounts it. The tenor still matures later for the issuing bank, but the exporter is paid at sight by the discounter.
What is the difference between deferred payment LC and usance (acceptance) LC?
Both pay after compliant presentation, not immediately. Deferred-payment LC: no draft is drawn — the bank incurs a deferred payment undertaking and pays at maturity. Acceptance (usance) LC: you draw a time draft (e.g., 90 days after B/L) which the bank accepts, and the accepted draft can then be discounted. Same economics, different instrument — check which one your LC calls for before arranging discounting.
How do exporters get paid early on a usance LC?
Through LC discounting: after presenting compliant documents, the exporter sells the usance LC (60/90/120 days) to a financier at a discount and receives cash in days. The financier is repaid by the issuing bank at maturity. Pricing depends on issuing bank and country risk — indicative 7–13% p.a. ⚠️.
What is UCP 600?
UCP 600 (Uniform Customs and Practice for Documentary Credits, ICC version 600) governs how LCs are issued and examined worldwide. It defines documentary compliance for both sight and usance mechanics.
Should I offer sight or usance LC as an exporter?
Offer sight if you need immediate cash and buyer can pay at once. Offer usance (60/90 days) to win orders where buyer needs credit — but only if you can discount the LC. Check buyer market coverage before agreeing to 90/120 days.
What is transshipment in LC terms?
Transshipment is transfer of goods from one vessel to another en route. LCs state whether transshipment is allowed or prohibited — relevant for B/L date which can start the usance period.