What can SBLC be used for?
Standby Letter Of Credit and Bank Guarantee can be used to enhance your ability to apply for a line of credit with your bank; in other words, it can be used as collateral when your bank is asking for additional comfort when you ask them to fund your project. We can help you acquire an Standby Letter Of Credit.
The Standby Letter Of Credit we deal in are genuinely 100% cash-backed and therefore usable as collateral. Our issuers only use top 25 World Banks – mainly from Europe like HSBC, Deutsche, UBS etc. This guarantees world wide acceptance of your Standby Letter Of Credit.
These Standby Letter Of Credit are generated by “someone” blocking their funds on your behalf, so we speak of a “leased” Standby Letter Of Credit. In other words the Standby Letter Of Credit is owned by the issuer and you are the beneficiary.
The Standby Letter Of Credit is generally issued for 1 year and 1 day, but can easily be extended up to 5 years. (It is possible to get an Standby Letter Of Credit for only 6 months). Once issued the Standby Letter Of Credit is transferred to your bank via the Swift protocol of MT760.
Of course, Leasing of an Standby Letter Of Credit comes at a cost. And to be very honest: at a high cost. Financing your project by using an Standby Letter Of Credit is very expensive. First you need to pay money to the issuer of the Standby Letter Of Credit plus commission to the consultants facilitating the process, Then you need to give the Standby Letter Of Credit to your bank, who are providing a Line of Credit against the Standby Letter Of Credit, which may only be up to 90% LTV or less. And usually, your bank will charge a one off fee to ‘monetarist’ the instrument and also charge interest on the drawn down loan amount.
To successfully apply for an Standby Letter Of Credit you need to be aware of four vital points:
a) You need to have a good project
b) You need to have a bank funding your project based on the supporting collateral of an issued Standby Letter Of Credit
c) You need to have the money to pay for the leasing of the Standby Letter Of Credit, you may also need to pay brokers if they are involved in the transaction.
d) You need to have a believable and realistic exit strategy to repay the loan and return the Standby Letter Of Credit at the end of the term
All the Standby Letter Of Credit we deal with are callable, assignable, fully transferable and alienable.
If you are thinking of using an Standby Letter Of Credit to participate in a High Yield Trade Program, we are more than happy to assist you in acquiring the Standby Letter Of Credit and placing it into trade.
However, you need to be very sure you are able to pay the leasing fees of the Standby Letter Of Credit before issue, as most providers will not allow the instrument to be taken into a Trade Program unless and until the fee is paid. You cannot pay the lease fee from the program returns.
It is also not possible to use an Standby Letter Of Credit to secure a commodity trade and pay for the SBLC out of the profits from the transaction. When paid for and used correctly, these instruments provide numerous lucrative options. we can provide Bank Guarantee, Standby Letter Of Credit and CD’s, which can be blocked or delivered via SWIFT.
Typical projects we have had successful applications for are:
– Resorts -Building or Upgrading
– Growing a Company
– Trade Programs