Standby Letters of Credit

A flexible tool for a variety of situations

Get payment assurance with standby letters of credit

When you encounter a business transaction that requires assurance that your payment will be made, a standby letter of credit, or SBLC, may be what you need. An SBLC doesn't have to be related to the purchase of goods or services. It's based on a contractual agreement or other obligation and is drawn upon by the beneficiary only when the applicant fails to meet the underlying obligation.

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Benefits
Advantages of standby letters of credit

Certify

Certify creditworthiness in domestic as well as foreign transactions.

Simplify

Eliminate the need for cash deposits or more complicated guarantees, such as bid or performance bonds.

Validate

Establish creditworthiness of US-based parent companies to subsidiaries overseas.

Save

Reduce banking costs, since standby letters of credit are less expensive than bonding and other credit facilities.

Guarantee

Ensure that international transactions are properly structured.

Foreign Currency
Make business and travel abroad secure and simple

Get the foreign currency you need to do business in other countries.
Learn more about our foreign currency services

Remote Deposit Capture
Deposit money from anywhere

Deposit checks remotely for faster processing and extended deposit hours.
Learn more about Remote Deposit Capture

FAQ
People often ask us

A standby letter of credit, or SBLC, is a document issued on behalf of a client to substitute the Bank's credit standing for that of the client. Unlike a commercial letter of credit—which is used to effect payment for goods and services—a standby letter of credit is used to assure payment or performance of an obligation by a Bank client. It's a flexible financial tool that can be used in a variety of situations to cover the risk of nonperformance or provide assurance that contract obligations will be fulfilled.

Standby letters of credit may be used when a company has a financial or performance obligation to meet and the other party requires a guarantee that the company will fulfill its obligation. For example, a lessor may require a lessee to provide a letter of credit in the event he fails to pay rent.

Standby letters of credit are typically funded in an event of default and are drawn upon by the beneficiary only when the applicant fails to meet their underlying obligation. Commercial letters of credit are a payment mechanism and funds are paid to a beneficiary after they've complied with the terms of a letter of credit.

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First-Citizens Bank & Trust Company, as well as its divisions, subsidiaries, and affiliates (together, First Citizens), are US financial institutions and provide products and services to non-US clients on a cross-border basis from the United States of America. First Citizens is not licensed or regulated as a bank or any other type of financial institution outside of the United States of America. Please review our International Disclosures for more information.

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