One major difference is that with standard lines of credit it's a transaction between the bank loaning funds and the borrower only. With letters of credit, the

One major difference is that with standard lines of credit it's a transaction between the bank loaning funds and the borrower only. With letters of credit, the payee is also a signatory to the contract. edit: and I guess the payee's receiving financial institution is also a signatory if those are different entities from the payee! Or at least can be, I'm running into Dunning Kruger so I'll tap out now.