standby letter of credit (L/C)
Definition
Primarily a substitute for a performance bond or payment guaranty, this L/C 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.
Mentioned in these definitions
Popular 'Accounting & Auditing' Terms
standby letter of credit (L/C) in the news
This content can be found on the following page:
http://www.businessdictionary.com/definition/standby-letter-of-credit-L-C.html







