Standby letter of credit (L/C)

Standby letter of credit (L/C),

Definition of Standby letter of credit (L/C):

  1. 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?

  1. You may want to ask for a standby letter of credit so that you have proof of the deal that has taken place.
  2. 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.
  3. 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