"Lease support is probably the most widely-known advantage of standby letters of credit," said Cassandra D. Stiles, Comerica Bank first vice president, International Trade Finance.

"Many landlords offer the option of providing a standby letter of credit instead of requiring 12 month's rent up front to protect themselves from broken leases.

The SBLC frees up cash for other business or interest-earning endeavors.

Another practical use of an SBLC is in the complex workers' compensation arena.

For companies that self-insure, the SBLC can be used in lieu of cash deposits that are required to be paid to the state government.