fully funded documentary letter of credit (FFDLC)

A written payment agreement a seller provides a buyer as proof that funds have been deposited with a specific bank. The seller can present the document to the bank for payment when all terms of the agreement have been fulfilled. Such terms may include presenting certain documents such as a BOL stamped by Customs as proof of shipment for goods. The conditions under which funds may revert to the buyer (e.g., seller's failure to provide a BOL within a set time period) are outlined in the letter of credit. Often used for international transactions when contract terms would be difficult to enforce.