Standby Letter of Credit
We provide comprehensive advisory and evaluation services as we receive your SBLC request and process it with our partners. An SBLC is typically used as collateral when companies receive financing from an investment fund, monetize on high-yield platforms, or as collateral in a buy/sell transaction. These banking instruments or bank letters of credit can be Leased or Purchased depending on your needs.
An SBLC (Standby Letter of Credit) is a financial instrument delivered by a bank that can serve several different purposes. They are usually leased or purchased to carry out commercial business transactions. Several banks internationally issue financial instruments, however some requests require a specific bank. The most recognized are Tier 1 Banks as they are better evaluated and have a better rating in the financial world.
Most Requested Standby Letter of Credit (SBLC)
Bid Bond Guarantee:
A bid bond guarantee is presented upon request by a company that is involved in a bid for the supply of goods or services, usually public works construction in a foreign country. The instrument’s purpose is to ensure that bidders do not withdraw or modify their bid until the contract is awarded. Otherwise, the beneficiary of the guarantee would be covered by any costs incurred in examining the received bids. The usual deadline is limited to the expected award date, and may be extended if necessary (term extension of the tender). Normally these guarantees are issued with the commitment that if the contract is awarded, a guarantee of compliance or operation will be sent.
Performance Bond:
This type of SBLC is intended to ensure payment to the buyer in the event that the seller fails to comply with its contractual obligations. Its function is to ensure the interests of the buyer so that they receive exactly what is contractually agreed. This type of collateral usually is also used when a private investment fund asks their client to present a financial instrument or bank guarantee in order to disburse the funds.
Payment Guarantee:
It supports business transactions and is usually delivered by the buyer of a product/service to the seller and serves as a guarantee of payment in case the customer does not comply with the stipulations. The seller has the assurance that if the customer does not make the payment, executing the guarantee, and complying with the indicated requirements, he is guaranteed to collect the funds.
Advance Payment Guarantee:
This type of SBLC is used in the event that the exporter requires an advance payment by the importer. These guarantees are useful if the seller asks the buyer for an advance payment. In this case, the buyer guarantees the return of the anticipated amounts if the seller does not comply with the contract
Contract our professional consulting services as we advance together in your Standby Letter of Credit issuing process.