One of the types of documentary letter of credit is a Standby Letter of Credit (SBLC). Standby Letter of Credit is a written undertaking of the issuing bank to the beneficiary (exporter, supplier) to make payment for the applicant (importer, buyer) in the event that the latter's contractual obligations and the presentation of a written demand by the beneficiary of the payment.

Stand-by letter of credit is available to provide guarantee of performance of obligations of the issuer to a beneficiary. SBLC is used primarily in the banking practice of Anglo-Saxon countries such as the U.S. and the UK, it is a good way to protect against the risk of no-payment, but the SBLC is not a mechanism of payment of delivery.