standby letter of credit (L/C)

Popular Terms
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.

Use 'standby letter of credit (L/C)' in a Sentence

The standby letter of credit was sufficient for our business partner to be willing to proceed in undertaking the project.
20 people found this helpful
You may want to ask for a standby letter of credit so that you have proof of the deal that has taken place.
19 people found this helpful
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.
18 people found this helpful

Email Print Embed