What is a standby letter of credit (SLOC)?
A standby letter of credit is primarily used to guarantee an agreement or another letter of credit. For example, it could be used when a bank guarantee is required or let’s say that you would have a letter of credit from a small bank and the beneficiary of the LOC requires more collateral. A standby letter of credit from a larger bank to back up the letter of credit of the smaller bank. Check out these links for some uses for a Letter of Credit: http://www.wisegeek.com/what-are-some-uses-for-a-letter-of-credit.htm http://www.fraudreview-iesc.com/pdfs/Article3.pdf http://www.crfonline.org/search/search.asp?keywords=ron+borcky http://www.sio.org/html/SBvsLOC.
