Standby Letter of Credit MeaningStand By Letter of Credit (SBLC), it is a bank instrument quite similar to a bank guarantee "BG"; they both make sure that the beneficiary gets paid. You might see "SLOC" abbreviation, this is just the same thing as an SBLC - it's all in the spelling.
What is an SBLC?
Although it is not a form of payment, a Standby Letter of Credit acts like a back up payment should payments not be made. If the Buyer doesn't meet payment obligations set in the Deed Of Agreement (DOA), the Provider of the SBLC, is offered protection by the bank. Any business can apply for an SBLC but generally speaking those who need an SBLC tend to be within the Industrial sectors and in Oil and Gas