Who is a Standby Letter of Credit Provider (SBLC MT760)?
A Standby Letter of Credit Provider (SBLC MT760) is a financial services provider such as Artley Finance (HK) Limited that provides standby letters of credit (SBLC) from prime banks like HSBC, Barclays bank, citibank chase bank, bank of America etc.
Artley Finance (HK) Limited is the leading Standby Letter of Credit Provider (SBLC MT760) in the world.
What Are Standby Letters of Credit?
A Standby Letter of Credit also known as (SBLC) is an irrevocable commitment or guarantee of payment by a bank or other financial institutions on behalf of their Client or in favor of the Beneficiary. Very much like Bank Guarantee, a Standby Letter of Credit can be used by Buyer as collateral to secure a Loan or Credit Facility or to make purchase in foreign business transactions. SBLCs are very flexible instruments for all types of business. It can cover anything from an ordinary guarantee commitment to a more sophisticated financial instrument.
Standby Letter of Credit (SBLC MT760) Provider - Artley Finance (HK) Limited.
Standby Letter of Credit (SBLC MT760) Provider
As genuine Standby Letter of Credit (SBLC MT760) Providers, SBLC from Artley Finance (HK) Limited can be useful to both importers and exporters to buy more goods from foreign producers and manufacturers. Standby Letter of Credit (SBLC MT760) is one of the most sought after tools in foreign trade transactions.
‘Leased’ SBLCs is a term used when a Bond/Security is transferred for certain duration to Client or in favor of the Beneficiary to act as Collateral Security to secure a credit facility or loan. This process is called a Collateral Transfer…
SBLCs are mostly issued to profitable companies with strong balance sheets and a proven trading history; Artley Finance (HK) Limited being an experienced SBLC provider adopts this process of Collateral Transfer or the Syndicate enrollment to position Client to access these financial Instruments via their Issuer bank platforms, as long as they can afford the interests and costs of issuance.
Types of Standby Letter of Credit (SBLC/SLOC)
Financial standby LOC: An exporter sells goods to a foreign buyer, who promises to pay within 60 days. If the payment never arrives (and the exporter required the buyer to use a standby letter of credit) the exporter can collect payment from the importer’s bank. Before issuing the letter of credit, the bank typically evaluates the importer’s credit and determines that the importer will repay the bank. But if the customer’s credit is in question, banks may require collateral (or funds on deposit) for approval.
Performance standby LOC: A contractor agrees to complete a construction project within a certain timeframe. When the deadline arrives, the project is not complete. With a standby letter of credit in place, the contractor’s customer can demand payment from the contractor’s bank. That payment functions as a penalty to encourage on-time completion, funding to bring in another contractor to take over mid-project, or compensation for the headaches of dealing with problems. This is an example of a “performance” standby letter of credit, and a failure to perform triggers the payment.
Advantages of a Standby Letter of Credit (SBLC / SLOC)
An SBLC helps ensure that the buyer will receive the goods or service that’s outlined in the document. For example, if a contract calls for the construction of a building and the builder fails to deliver, the client presents the SLOC to the bank to be made whole. Another advantage when involved in global trade, a buyer has an increased certainty that the goods will be delivered from the seller.
Also, small businesses can have difficulty competing against bigger and better-known rivals. An SBLC can add credibility to its bid for a project and can often times help avoid an upfront payment to the seller.
The SBLC / SLOC is often seen in contracts involving international trade, which tend to involve a large commitment of money and have added risks.
For the business that is presented with a SLOC/SBLC, the greatest advantage is the potential ease of getting out of that worst-case scenario. If an agreement calls for payment within 30 days of delivery and the payment is not made, the seller can present the SLOC to the buyer’s bank for payment. Thus, the seller is guaranteed to be paid. Another advantage for the seller is that the SBLC reduces the risk of the production order being changed or canceled by the buyer.
SBLC Monetization – Monetize Bank Instruments Such As BG & SBLC
Artley Finance (HK) Limited are also SBLC monetizers, we can monetize any bank instrument from rated banks. We cannot monetize bg / sblc from unrated banks because they are unattractive and their value / LTV is very low. So if you want to monetize your instrument to fund your project or for humanitarian projects, make sure that the instrument (BG/SBLC) is from a prime bank.
SBLC monetization is the process of liquidating a standby letter of credit (SBLC) by converting them into cash. As the top SBLC Monetizers, we monetize Bank Guarantees (BG’s), Stand-By Letters of Credit (SBLC or SLOC), Bank Draft, Medium Term Notes (MTN’s) and some Long Term Note (LTN) for our clients.
So SBLC can be structured to act a a Loan Security. In the event that a Client wants to secure a Loan or funding and have access to an SBLC, we will engage our Lender platform to obtain a Credit Facility. This Facility must be secured and collateralized by a cash backed SBLC. If it does not have a qualifying SBLC then, Artley Finance (HK) Limited can engage their Issuer bank to set-up Guarantee Facility in favor of clients to act as their Issuer. Therefore, Artley Finance (HK) Limited can incorporate a Bilateral Funding Program where we can merge services of our Issuers and that of our Lenders to avail Monetized Loan Funding.
NOTE: Qualifying Instruments
- The instrument needs to be a Asset/Cash Backed Bank Instrument, such as a BG or SBLC.
- The Bank needs to be a World Top 25 Bank with a “A+Bank-Rating” or better.
- The instrument must be transferable and will need to be transferred to the lender via MT799 or MT760.
Monetize Bank Instruments – SBLC Monetization Monetization
In order to monetize an SBLC (SBLC Monetization) you must be in possession of the instrument and it must be paid for prior to monetizing (Obtain a Bank Confirmation Letter from your issuer saying they are RWA to issue to Lender Bank for monetization). The Benefits of Monetized funds include
- Use Standby Letter of Credit (SBLC or SLOC) as Loan Security
- Finance Trade Facilities
- Offset Tax and Debt Liabilities
- Free-up Locked (or blocked) Funds
- Create Fixed Returns
- Verification & Due Diligence Services
Bank Instruments such as Letters of Credit are frequently used but seldom properly understood. Whilst these ‘instruments’ are utilized in conventional trading on a day to day basis, they can also be employed in complex financial structures designed to maximize financial positions and bespoke to each individual requirement.
Through existing credit relationships, Artley Finance (HK) Limited is able to accommodate bank obligations such as Bank Guarantees, Standby Letter of Credit as well as facilitate credit line and monetization of these Guarantees.
The SBLC may allow the beneficiary to obtain payment from a financial institution even when the applier for the credit has neglected to perform as per bond, a key principal with this instrument is bank deal only with documents or good, and the bank do not involve themselves in the commitments or contracts between the two parties directly, the advantage of this system is the bank don’t check the reliabilities of the project. The concern of the issuing bank is the term and the condition of the credit itself. The decision of the Bank Instrument is based entirely on whatever the documents submitted to the bank appear on their face to comply with the term of LC Bank Instrument.
As genuine bank instrument providers, our Global network specializes in the Monetization of almost any type of Bank Financial Instrument worldwide from 5 Million to 5 Billion Dollars. Offering up to 80% of LTV, with 3% APR interest charges due yearly, facility / loan terms up to 10 years.
We offer a fast completion process of between 7 to 14 working days.
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BELOW IS THE DESCRIPTION OF LEASE BANK INSTRUMENTS (BG/SBLC/SLOC) 1. Instrument: Fully Cash Backed Bank Guarantee {BG} or StandBy Letter of Credit {SBLC} 2. Total Face Value: USD 2Million (Min) to USD 500m (Max) 3. Issuing Bank: HSBC Hong Kong, Barclays Bank London or any prime Bank. 4. Age: One Year and One Day (with rolls and extensions where applicable) 5. Leasing Price: 4% (+ 2% brokers commission where applicable) 2% broker commission applies to clients that were introduced by brokers 6. Delivery: SWIFT MT-760 7. Payment: MT103 Wire Transfer 8. Hard Copy: Bonded Courier within 7 banking days.9. Bank Transmission fee: Depends on the face value of the bank instrument |
Uses of Standby Letter of Credit (SBLC)
An SBLC is frequently used in international and domestic transactions where the parties to a contract do not know each other. A standby letter of credit serves as a safety net by assuring the seller that the bank will make payment for the goods or services delivered if the buyer fails to make the payment on time.
How to spot a fake SBLC provider and other Bank Instrument Providers
Organizations trying to “lease” or “buy” bank instruments ensure you are managing genuine, real and performing providers. You have to be very sure that the financial or the bank instrument provider that you are relying on is not a fake one, and they are providing you genuine services. The Fake SBLC provider mostly will give you all kinds of guarantees of a performing SBLC and will tell you all the benefits thoroughly. It is extremely difficult to spot a fake bank instrument provider from a real one and you have to be really attentive towards the details.
However, if you are new to this. Here are a few ways you can spot a fake SBLC provider –
1. DOA with grammar botches, made out of different bits of different kinds of agreements.
2. A few titles ascribed to one gathering: “Renter – the buyer – recipient” across the board contract. “Lessor – Seller – Provider” across the board contract.
3. Non Verifiable information of the instrument supplier. The false website, national telephone numbers obtained from Skype, organizations enlisted in the seaward zone, fake LI profile(s) of the “supplier’s group” and so on.
4. ICBPO to be issued by the Lessee’s bank for the Lessor. This convention is illegal by the vast majority of the world banks on account of the abnormal state of fraud around it. By issuing ICBPO the Lessee’s bank resolves to exchange assets to the Lessor paying little respect to the consequences of the renting exchange.
5. The title or the name of the expense accepting record is different from the title/name of the instrument issuing account. Bonafide Lessors may pick different records to get renting expenses and issue bank instruments however in the event that these records are under the names of different elements, run. We highly recommend you to read this article: How to Find Genuine BG/SBLC Providers: A Guide to Secure Financial Instruments
How do SBLCs work in Cross-Border trade?
Where goods are sold to a counterparty in another country, they may have used an SBLC to ensure their seller will be paid. If there is a non-payment, the seller will present the SBLC to the buyer’s bank so that payment is received.
A performance SBLC makes sure that the criteria surrounding the trade such as suitability and quality of goods are met.
We sometimes see SBLCs in construction contracts as the build must fulfil many quality and time specifications. If the contractor does not fulfil these specifications then there is no need to prove loss or have long protracted negotiations; the SBLC is provided to the bank and payment is then received.
Who is a Genuine SBLC Provider? How Does One Find Genuine BG/SBLC Providers?
Genuine SBLC Providers are bank or financial services providers like Artley Finance (HK) Limited that provide real and genuine SBLC from prime banks.
To understand who these Providers are and how they function, one must understand what is called Collateral Transfers in the financial world. Collateral Transfer is the process of transferring assets from one party (the Provider) to another party (the Beneficiary) often in the form of a Bank Instrument (BG/SBLC). This occurs whereby the Provider agrees (through his Issuing Bank) to issue a “Demand Guarantee” to the Beneficiary in return for a “rental” or “return” generally known as the “Contract Fee”. The parties agree to enter into a Collateral Transfer Agreement (CTA) which governs the issuance of the guarantee.
How to Obtain a Standby Letter of Credit (SBLC / SLOC)
There are many aspects that a bank will take into consideration when applying for a Standby Letter of Credit, however, the main part will be whether the amount that is being guaranteed can be repaid. Essentially, it is an insurance mechanism for the company that is being contracted with.
As it is insurance, there may be collateral that is needed in order to protect the bank in a default scenario – this may be with cash or assets such as property. The level of collateral required by the bank and by the size of the SBLC will largely depend on the risk involved, and the strength of the business.
Generally speaking, the standby letter of credit process is similar to that of obtaining a commercial loan, with a few key differences.
As with any business loan, you will need to provide proof of your creditworthiness to the bank. However, the SLOC approval process is much quicker, with letters often being issued within a week of all paperwork being submitted.
Artley Finance (HK) Limited is a Standby Letter of Credit (SBLC) provider at a 4% leasing fee per year. All our bank instruments are issued from prime banks such as HSBC Hong Kong, Barclays Bank London, Standard Chartered Bank or any AAA-rated bank of your choice.
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