A bank confirmation letter (BCL) is a letter from a bank or financial institution that confirms the existence of a loan or a line of credit that has been extended to a borrower. The letter officially vouches for the fact that the borrower, typically an individual, company, or organization, is eligible to borrow a specified amount of funds for a specified purpose. A BCL is not a guarantee of payment, but an assurance of the borrowers financial resources to complete a purchase. Bank confirmation letters are typically issued to business customers vouching for their creditworthiness. They can also be issued for a company that is entering into a joint venture project with another company. Individuals may request a BCL during the purchase of a home or land in order to secure a mortgage or establish creditworthiness with the seller. The primary purpose of a BCL is to provide confidence to a third party, usually a seller, that the borrower possesses sufficient financial resources to execute a specific transaction, such as purchasing goods. A BCL doesn’t serve as a payment guarantee but rather as an assurance of the borrower’s financial capacity to fulfill their payment obligations. Regulations regarding BCLs vary by country.