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Running Finance is basically a financial offer by financial institutions against mortgages. It is actually a credit facility which is offered for a specific time limit at variable interest rate. It is implemented by allowing over draft facility. The corresponding amount is determined by finding out about the repaying ability of the borrower.
On the other hand, a Letter of Credit is a document which is used in trade finance. It provides an irrevocable payment undertaking to a beneficiary against any complying documents according to terms of the Letter of Credit. It is issued by a financial institution.
Thus, there is no relation between running finance and letter of credit. They are used as separate financial instruments.
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