A standby letter of credit is a lender's commitment of payment to an interested third-party in case the client defaults on an agreement. What is a Standby Letter of Credit and How Are They Used? What is mt760 standby letter of credit? What is a SBLC financial instrument? What is letter of credit and how it works? Standby Letter of Credit: A Backup Plan for Payment. A standby letter of credit is a bank guarantee that gets triggered when something fails to happen. Standby Letter of Credit details. The letter of credit standby - Manage risk in export business. A standby letter of credit (SLOC) is a financial instrument used primarily in international trade and domestic construction projects.