Letters of Guarantee/Standby Letters of Credit

Letters of Guarantee/Standby Letters of Credit can be used for business payments between two or more parties by acting as a tool for finance or guarantee.

What are the benefits of using Letters of Guarantee/Standby Letters of Credit?

  • Ensures the landlord rent payments, damages or property damage

  • Simplifies financing as the seller can receive payment for the product paid for before it arrives

  • If the provisions of the guarantee have been met, then the bank is obliged to pay the value of the product

Lease guarantee

  • The most common form of guarantee
  • You can apply for a rent guarantee by filling out a Letter of Guarantee/Standby Letters application (in Icelandic)
  • The rent guarantee is based on the rental contract. A signed rental contract must be provided with your application