A Standby letter of credit is used mainly in the US where banks are legally barred from issuing certain types of guarantees. It serves as a alternative finance payment source in case the primary source fails to meet its obligations in part or in full and is a substitute for a performance bond or payment guaranty. Hence it is called standby credit. Unlike a documentary letter of credit, an SBLC is never intended to used. These are more common in import export and trade finance. SBLC’s are typically delivered via SWIFT MT-760