Definition

Standby Letter of Credit

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Standby Letter of Credit (SLOC), also abbreviated as SBLC, is a legal document that provides guarantee of payment to a seller of goods and services on behalf of the buyer or client of the bank.

SLOC is never meant to be exercised but provides last resort if the company fails to pay on the event of bankruptcy or any other reasons. It helps in enhancing the trustworthiness of the company.