Standby Documentary Credit

• 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

• 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

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.