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Standby Documentary Credit
Why is this payment method right for you?
- You can use it to guarantee payment in case of default or non-performance
- Gives suppliers payment assurance to accept open account trading
- Allows you to leverage your credit standing to secure banking facilities for other companies
Other benefits
- A way to consolidate bank relationships in one office for greater convenience and control
- Can be used as an alternative to performance and bid bonds
- Accepted in countries such as the US where bank guarantees are not allowed
- Can provide substantial savings in transaction fees if you make purchases of similar amounts at regular intervals from the same supplier
How does a Standby Documentary Credit work?
Standby Documentary Credits (SDCs) are generally used to guarantee a third-party's credit facility. The most common type of SDC is opened on behalf of a parent company, in favour of the lending bank, to guarantee facilities granted to its subsidiary.
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