Standby letter of credit (L/C),
Definition of Standby letter of credit (L/C):
A letter of credit that is used mainly in the US where banks are legally barred from issuing certain types of guaranties. It serves as a parallel (collateral) payment source in case the primary source fails to meet its obligations in part or in full and is a substitute for a performance bond or payment guaranty. Also called standby credit.
How to use Standby letter of credit (L/C) in a sentence?
- You may want to ask for a standby letter of credit so that you have proof of the deal that has taken place.
- My credit score was not enough to finance my new house, so I received a standby letter of credit from my bank which was co-insured by my grandma.
- The standby letter of credit was sufficient for our business partner to be willing to proceed in undertaking the project.
Meaning of Standby letter of credit (L/C) & Standby letter of credit (L/C) Definition