A transferable letter of credit is a letter of credit that allows the first beneficiary to transfer some or all of the credit to another party, creating a secondary beneficiary. The party that initially accepts the transferable letter of credit from the bank is referred to as the first, or primary, beneficiary, while the party that applied for the letter of credit is the applicant. A transferable letter of credit is often used in business deals to ensure payment to a supplier or manufacturer and is an alternative to making an advance payment.