• A bank confirmation letter (BCL) validates that a bank has a line of credit in place with one of its customers.
• Bank confirmation letters are typically issued to business customers vouching for their creditworthiness.
• 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.

How a Bank Confirmation Letter (BCL) Works

A bank confirmation letter’s purpose is to assure a third party, generally a seller, that the borrower has access to sufficient financial resources to complete a transaction, such as the purchase of goods. The confirmation letter—sometimes known as a comfort letter—is not a guarantee of payment, but only an assurance of the borrower’s financial resources to make payment.

Bank confirmation letters typically require the signature of representatives of the bank or the financial institution who are authorized to issue such correspondence.