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Standby Letter of Credit and Builders Letter of Credit
(Source: New York State Banking Department)

 

Bank Name FIRST NATIONAL BANK OF ROCHESTER
Program Name STANDBY LETTER OF CREDIT and BUILDERS LETTER OF CREDIT
Program Description Standby Letter of Credit: A letter of credit that is normally written to be drawn on only in the event of nonperformance of a specified event, Standby letters of credit are issued for periods up to 12 months in favor of domestic parties.
Builders Letter of Credit:
A letter of credit generally provided to municipalities for surety as to the satisfactory completion of projects by residential developers.
Eligibility Requirements A business that is located in the Bank's trading area, that is in good standing, and that is not highly leveraged.
Loan Elements
Purpose To guaranty payment.
Size Maximum $2 million.
Repayment Terms At maturity.
Documentation Required Yes.
Collateral and Guarantees Standby Letter of Credit: Guarantees not required. Highly liquid collateral required.
Builders Letter of Credit:
Guarantees required. Underlying real estate required and additional collateral may also be required.