When Mark Wilbur decided to move his company from downtown to El Segundo recently, he ran into some unexpected opponents: banks.

That’s because the new space for Employers Group, a human resources consultancy Wilbur serves as president, required some costly tenant improvements, and the landlord demanded a letter of credit worth $300,000 to cover them. Wilbur was told he could get that letter of credit – as long as he bought a certificate of deposit for $300,000 and pledged it to the bank.

“Why am I going to deposit the cash equivalent to get a letter of credit?” Wilbur asked. “It’s moronic.”

Wilbur came up with a solution: a “self-funded letter of credit.” It worked because the new landlord, like so many others in this economy, had agreed to give Employers Group free rent for the first several months. Instead of pocketing the money, Wilbur went ahead and paid the rent it to the landlord, who agreed to keep the money in a fund, which acted as a guarantee not unlike a letter of credit. The landlord agreed to pay back that money gradually as free rent during the 10-year lease.

“The landlord was on this deal like a bear on steak,” said Wilbur, who believes other tenants and landlords could use the strategy. “Every landlord we talked to loved the idea because it breaks the loggerhead for tenants who are struggling with the letter of credit issue.”

Matthew May, owner of commercial brokerage May Realty Advisors in downtown Los Angeles and who was not involved in the deal, said letters of credit have become a problem for many tenants looking to relocate.

“It’s a trend only because credit has become more difficult,” May said. “You’re forced to be more creative.”

Wilbur said he likes the idea of cutting banks out of the picture because it streamlines the tenant-landlord relationship.

“This is an entrepreneurial way to try to get business moving again,” he said. “If we wait for the banks to get creative, we’ll be waiting for a very long time.”