Standby letter of credit

STANDBY LETTERS OF CREDIT (SBLC)
imagesCA6Q5LV6An SBLC is commonly used to back up a loan or line of credit in order to show financial strength and to back up the loan in case the client defaults. If the client defaults the SBLC is called upon to pay the default. Lenders like this because it assures them that their loan or line of credit will be repaid regardless of the actions of the borrower. These SBLCs are insured to protect the investors if a default occurs (God forbid) but in many cases SBLCs will qualify a client for a line of credit or loan they would otherwise not qualify for without it.

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