{"id":16077,"date":"2023-01-22T09:50:00","date_gmt":"2023-01-22T09:50:00","guid":{"rendered":"https:\/\/businessyield.com\/?p=16077"},"modified":"2023-01-23T08:51:25","modified_gmt":"2023-01-23T08:51:25","slug":"standby-letter-of-credit","status":"publish","type":"post","link":"https:\/\/businessyield.com\/bs-business\/standby-letter-of-credit\/","title":{"rendered":"STANDBY LETTER OF CREDIT: Baby Steps To Better Understanding (+ Practical Examples)","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"\n
Imagine a company involved in international trade that wants to sell a commodity to a buyer who they don’t know in person. What assurance do they have that the buyer will pay when the product is sent to him? Or what will be their fate if the supposed buyer decides to abscond with their product. This is why most seller demands a standby letter of credit. Hence hedging out the risk involved to a bank that will guarantee to pay if the buyer defaults or breach the agreement. This article will serve as a guide in showing the reader what is standby, and irrevocable standby letter of credit. It will also cover examples and samples of a standby letter of credit. Not leaving behind the difference between standby letter of credit vs letter of credit.<\/p>\n\n\n\n