What is a Standby Letter of Credit (SBLC)?
Standby Letter of Credit (SBLC)
A Standby Letter of Credit (SBLC) is a bank-issued guarantee ensuring payment to a beneficiary if the buyer (or borrower) fails to meet contractual obligations, often used in real estate financing and development deals.
Application to Real Estate
- Loan Security – Lenders may require an SBLC as additional security for large real estate transactions.
- Construction Projects – Developers use SBLCs to assure contractors and suppliers of payment in case of funding delays.
- Lease Agreements – Tenants with high-risk profiles may provide an SBLC to landlords as a rental payment guarantee.
