How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lane Your Own Question
Category: Finance
Satisfied Customers: 12659
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Type Your Finance Question Here...
Lane is online now
A new question is answered every 9 seconds

Qestion about SBLC, how does that work,

Customer Question

qestion about SBLC, how does that work,
Submitted: 2 years ago.
Category: Finance
Expert:  Lane replied 2 years ago.



A guarantee of payment issued by a bank on behalf of a client that is used as "payment of last resort"if you fail to fulfill a contractual commitment of some sort with a third party.


Standby letters of credit are (in theory) created as a sign of good faith in business transactions, (but in reality servce as proof of a buyer's credit quality and ability to repay.


The bank issuing the SLOC will perform brief underwriting (because THEY are now accepting the risk)to make sure of your credit quality, then send notification to the bank of the party requesting the letter of credit (typically a seller or creditor).

Expert:  Lane replied 2 years ago.

If you don't pay the bank that issued the SLOC is on the hook to make payment