By letter of credit, the difference between factoring loan and ordinary loan is that the former is a one-time buyout of the income right under the letter of credit from the factoring company or bank, which has no recourse, so this situation does not belong to the nature of "loan"; The latter is to mortgage the income right under the letter of credit to the bank, so as to borrow a sum of money from the bank. However, if the income right under the letter of credit is not cashed by the issuing bank in the future, in other words, the issuing bank has no payment, then the lending bank has the right of recourse, that is, it can ask the beneficiary for the most loans.
It should be noted that the above refers to the borrowing behavior of the beneficiary of the letter of credit when he obtains the right to income. The letter of credit itself cannot be used for factoring loans and ordinary loans before it is used.