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Business Man holding breifcase walking to the left with a bank graphic in the background and an expensive looking envelope on the right in front of the bank
Standby Letter of Credit (SBLC),
Proof of Funding (PoF),
Bank Guarantee (BG),
& Monetisation

A Standby Letter of Credit, one of the least understood but most powerful small business financing tools. While it’s used fairly extensively by larger companies, many small business owners frequently wonder what a standby letter of credit is, and aren’t aware of how it can help them and their enterprise succeed.

A Proof of Funds is a document prepared by a financial institution that affirms that an individual or business entity has the funds on hand to enter into a given financial transaction. A document of this type is sometimes prepared at the request of a seller who is considering an offer from a buyer. The seller requests the proof through the buyer, who in turn authorizes his or her bank or other institution to provide data that confirms the ability to honor the terms of the transaction.

We have also developed relationships with some of the Top banks in the world to Monetize Bank Instruments for clients worldwide by arranging the monetization against owned bank instruments such as BG’s (Bank Guarantees), LOC’s (Letter of Credit), SBLC’s (Standby Letter of Credit), and other banking and financial instruments.

This form of financing can be used in combination with our cash backed stand by letter of credit (SBLC) or Bank Guarantee (BG) Program in order to monetize the newly created document to obtain the right funds for project financing.

Monetizing bank instruments is the process of liquidating such instruments by converting them into legal tender. We can monetize or lend on just about any bank instrument to be used for project funding, move them into various trading platforms quickly and easily, as well as creatively incorporating them into financing certain development projects. We can monetize CD’s, SBLC’s, DPLC’s, BG’s and MTN’s. This can be accomplished in 5-15 business days.

Monetizing a sblc or stand by letter of credit is becoming rather common. Many people refer to this as sblc funding or sblc financing since you are essentially obtaining cash on the basis of the sblc or bank guarantee.

If you already know about and are interested in SBLC's, BG's, Monetisation, etc. use our
SBLC/Monetisation Request Form

If you are unsure a SBLC is right for you use our
FREE Consultation Form


THE STANDBY LETTER OF CREDIT:
WHAT IT IS AND HOW TO USE IT

Entering into a commercial or financial transaction always involves certain risks for the seller or the financier. The most serious risk is that of not being paid. There are many methods available to help ensure payment. One such method is through the use of a letter of credit.


The letter of credit substitutes the credit of a third party, usually a bank, for that of the buyer or debtor. In transactions in which a commercial letter of credit is used, the bank agrees to pay the seller for the goods sold, usually upon presentation of a document stating that the goods have been received by the buyer. In transactions in which a standby letter of credit is used, the bank agrees to pay the financier if the debtor defaults upon his obligation to pay. In both cases, the seller or financier is assured of payment, provided the conditions of the letter of credit are satisfied. Upon payment by the bank, the buyer or debtor is obligated to reimburse the bank.

Three legal relationships exist in a letter of credit transaction. First is the contractual relationship between the seller and buyer or the financier and debtor evidenced by a contract for the sale of goods or a contract to lend money. The underlying contract, in addition to creating an obligation of payment or performance, requires the buyer or debtor to arrange for a bank (the issuer) to issue a letter of credit to the seller or financier (the beneficiary). Second is the contractual relationship between the bank and the buyer or debtor (the bank's customer). The customer arranges for the bank to issue the letter of credit in favor of the beneficiary, and the customer agrees to pay the bank for the amounts paid under the letter of credit. Third is the relationship between the issuer and the beneficiary. This relationship is evidenced by the letter of credit. In most cases, Article Five of the Uniform Commercial Code (UCC) governs the use and interpretation of letters of credit. The UCC defines a letter of credit as "an engagement by a bank or other person made at the request of a customer that the issuer will honor drafts or other demands for payment upon compliance with the conditions specified in the letter of credit. There is no particular form required for a letter of credit other than that it must be in writing and signed by the issuer. No consideration is necessary.

These three relationships are separate and distinct. The letter of credit is independent from the underlying business transaction between the bank's customer and the beneficiary of the letter of credit. This independence from the underlying contract creates a primary obligation on the part of the bank to the beneficiary and is the key to the utility of a letter of credit. The bank's obligation to honor the letter of credit is not conditioned upon performance or nonperformance of the underlying contract. Instead, the bank's only obligation is to determine whether the drafts or demands for payment made by the beneficiary comply with the conditions specified in the letter of credit.

If the letter of credit requires presentation of documents for payment, then the bank must examine the documents with care to ascertain whether, on their face, they appear to comply with the terms of the letter of credit. If the conditions specified in the letter of credit have been satisfied, the bank must pay the beneficiary unless a required document is forged or fraudulent, or there is fraud in the transaction. If the fraud or forgery is not apparent on the face of the document, the bank may not refuse payment even if notified by its customer that there has been a fraud or a forgery committed. A court may, however, enjoin payment in such a case.

Upon payment of the letter of credit by the bank, the customer has no cause of action against the bank for improperly honoring the demand for payment unless the bank accepted noncomplying documents and did not use care and good faith in examining them. When the beneficiary makes a demand for payment of the letter of credit, he warrants to all interested parties that the necessary conditions of the letter of credit have been satisfied. If the beneficiary has made an improper demand for payment and did in fact receive payment, then the customer has a cause of action against the beneficiary for breach of this warranty.


Performance SBLC’s &
Financial SBLC’s

Standby letters of credit come in two primary forms: the performance standby letter of credit and the financial standby letter of credit. The performance standby letter of credit works to ensure that work you have agreed to perform is performed in a timely and satisfactory manner.

For example, if you own an architectural firm and are contracted to build a museum, you may be asked to provide a performance SBLC that guarantees that you will finish the plans by the end of your contract term, and that the structure you design is sound and meets all requirements. If, for some reason, you are unable to finish, or your design is deemed unsafe or unbuildable, the SBLC will take effect and pay the museum a preset amount.


Get Started with a Standby Letter of Credit

A financial letter of credit generally works on the other party in the exchange—in our example, the museum can be asked to provide a financial SLBC to your firm for the total amount of the project. If they fail to pay you after work is finished, the bank will issue payment to your business on behalf of your client.

These types of SBLCs are often required when performing international trade or other large purchase contracts where other forms of payment protections (such as litigation in the event of non-payment) can be difficult to obtain.


How to Obtain a Standby Letter of Credit

Obtaining a standby letter of credit is similar to obtaining a commercial loan, though with a few key differences. As with any business loan, you will need to provide proof of your creditworthiness to the bank.

Unlike a loan, the process for approval for a SBLC is much quicker, with letters often being issued within a week of all paperwork being submitted. Also unlike traditional loans, the bank will require a fee of between one and ten percent of the SBLC amount before issuing the letter. This fee is usually charged per year that the letter of credit is in effect. If the terms of the contract are fulfilled early, you can cancel the SBLC and not incur additional charges.

For small business owners, the standby letter of credit can be a powerful tool for establishing trust with suppliers and vendors. Obtaining an SBLC is proof that you and your company have good credit, and can put many suppliers at ease about providing you favorable financing terms. Furnishing a financial SBLC can often allow you to negotiate payment and financing terms with suppliers from a position of strength in order to get the best interest rates and payment schedule, while maintaining a good relationship with your suppliers.

If you provide services, on the other hand, offering to furnish performance standby letters of credit can be extremely useful to helping your business secure large contracts. Putting your clients at ease by being willing to guarantee your work financially can overcome many of the objections business owners face in the selling process.


What can a SBLC be used for?

SBLC’s (and BG’s) 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 SBLC.

The SBLC’s 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 SBLC.

These SBLC’s are generated by “someone” blocking their funds on your behalf, so we speak of a “leased” SBLC. In other words the SBLC is owned by the issuer and you are the beneficiary.

The SBLC is generally issued for 1year and 1 day, but can easily be extended up to 5 years. (It is possible to get an SBLC for only 6 months). Once issued the SBLC is transferred to your bank via the Swift protocol of MT760.

Of course, Leasing of an SBLC comes at a cost. And to be very honest: at a high cost. Financing your project by using an SBLC is very expensive. First you need to pay money to the issuer of the SBLC plus commission to the consultants facilitating the process, Then you need to give the SBLC to your bank, who are providing a Line of Credit against the SBLC, which may only be up to 90% LTV or less. And usually, your bank will charge a one off fee to ‘monetise’ the instrument and also charge interest on the drawn down loan amount.

To successfully apply for an SBLC 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 SBLC
c) You need to have the money to pay for the leasing of the SBLC
d) You need to have a believable and realistic exit strategy to repay the loan and return the SBLC at the end of the term

All the SBLC’s we deal with are callable, assignable, fully transferable and lienable.

If you are thinking of using an SBLC to participate in a High Yield Trade Program, we are more than happy to assist you in acquiring the SBLC and placing it into trade.

However, you need to be very sure you are able to pay the leasing fees of the SBLC 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 SBLC 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. v-funding can provide BG’s, SBLC’s and CD’s, which can be blocked or delivered via SWIFT.

Typical projects we have had successful applications for are:
- Construction and Development
- Resorts -Building or Upgrading
- Growing a Company
- Trade Programs


Letters of Credit Can Become Worthless

The deep and prolonged crisis in the financial services industry will result in numerous FDICinsured banks facing receivership or conservatorship. Undrawn letters of credit issued by these institutions are likely to be worthless. Parties to letter of credit transactions are advised to look carefully at their letters of credit and related documentation and enforce their right to require certain letters of credit to be replaced or, where possible, revise documents to require replacement of letters of credit issued by troubled institutions. At the end of this Alert, we have provided several suggested courses of action.


About Letters of Credit


The parties to a letter of a credit are as follows:
Issuer – the bank or thrift issuing the letter of credit is the Issuer.
Account Party – the party who obtains the letter of credit from the Issuer is the Account Party. Often, the Account Party arranging for a standby letter of credit delivers cash or other collateral to the Issuer to secure repayment of any draws on the letter of credit.
Beneficiary – the party who holds the standby letter of credit and who is authorized to draw under the letter of credit on the conditions stated in the letter of credit is the Beneficiary.

A standby letter of credit is issued by the Issuer to the Beneficiary at the request of the Account Party, and requires the Issuer to pay a specified sum to the Beneficiary upon satisfaction of the conditions of drawing specified in the standby letter of credit. The standby letter of credit will specify the maximum amount that may be drawn, the expiration date, the place where drafts must be presented and what certifications or deliveries must be made in connection with the draw request. Virtually all letters of credit utilized in real estate transactions are “sight draft” letters of credit, which means that the Beneficiary can require payment under the letter of credit upon delivery of a simple sight draft, which looks very much like a bank check, together with any other required certifications.

Letters of credit are governed by Article 5 of the Uniform Commercial Code (the “UCC”), which has been enacted in every state and the District of Columbia. In addition, parties generally agree that the letter of credit will be governed by the Uniform Customs and Practice for Documentary Credits (the “UCP”) or the International Standby Practices 98 (the “ISP”), both of which are promulgated by the International Chamber of Commerce. Standby letters of credit issued by US financial institutions are also subject to regulation by one or more of the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the Federal Reserve Board and the Office of the Comptroller of the Currency.

Standby letters of credit are generally issued and held pursuant to a separate contract between the Account Party and the Beneficiary – such as a lease, loan agreement, purchase agreement or public improvement agreement. The “underlying contract” between the Account Party and the Beneficiary is separate and independent of the letter of credit as a legal matter, but it will specify the requirements that the letter of credit must satisfy and when it can be drawn. If these documents are drafted properly, they will generally contain language that requires the Issuer to meet certain specified standards as to its financial strength.

Following is some typical lease language (although any actual language you use should be crafted to fit the particular case):

The Letter of Credit shall be issued by a commercial bank acceptable to [Landlord] and (1) that is chartered under the laws of the United States, any State thereof or the District of Columbia, and which is insured by the Federal Deposit Insurance Corporation; (2) whose long-term, unsecured and unsubordinated debt obligations are rated in the highest category by at least two of Fitch Ratings Ltd. (Fitch), Moody’s Investors Service, Inc. (Moody’s) and Standard & Poor’s Ratings Services (S&P) or their respective successors (the Rating Agencies) (which shall mean AAA from Fitch, Aaa from Moody’s and AAA from Standard & Poor’s); and (3) which has a short term deposit rating in the highest category from at least two Rating Agencies (which shall mean F1 from Fitch, P-1 from Moody’s and A-1 from S&P) (collectively, the LC Issuer Requirements). If at any time the LC Issuer Requirements are not met, or if the financial condition of such issuer changes in any other materially adverse way, as determined by [Landlord] in its sole discretion, then [Tenant] shall within [five (5)] days of written notice from [Landlord] deliver to [Landlord] a replacement Letter of Credit which otherwise meets the requirements of this [Lease] and that meets the LC Issuer Requirements (and [Tenant]’s failure to do so shall, notwithstanding anything in this [Lease] to the contrary, constitute an Event of Default for which there shall be no notice or grace or cure periods being applicable thereto other than the aforesaid [five-day] period). Among other things, [Landlord] shall have the right under such circumstances to immediately, and without further notice to [Tenant], present a draw under the letter of credit for payment and to hold the proceeds thereof.


Following is some typical language for the governing documents (and once again, any actual language you use should be crafted to fit the particular case):

In the event the issuer of any letter of credit held by [Landlord] is insolvent or is placed into receivership or conservatorship by the Federal Deposit Insurance Corporation, or any successor or similar entity, or if a trustee, receiver or liquidator is appointed for the issuer, then, effective as of the date of such occurrence, said Letter of Credit shall be deemed to not meet the requirements of this Section, and then [Tenant] shall within [five (5)] days of written notice from [Landlord] deliver to [Landlord] a replacement Letter of Credit which otherwise meets the requirements of this [Lease] and that meets the LC Issuer Requirements (and [Tenant]’s failure to do so shall, notwithstanding anything in this [Lease] to the contrary, constitute an Event of Default for which there shall be no notice or grace or cure periods being applicable thereto other than the aforesaid [fiveday] period); or, alternatively, [Tenant] shall, within such [five-day] period deliver cash to [Landlord] in the amount required above.


Letters of credit typically follow a fairly pre-determined format. However, the Issuer will often agree to include customized language which might include, among other things, the Beneficiary’s automatic right to draw in the event the letter of credit is due to expire without being renewed or replaced, or if the Issuer’s credit rating drops below a specified level.

It is obvious that a Beneficiary is in a much better position if it draws upon a letter of credit for payment, and retains the proceeds, before the Issuer is subject to a receivership or conservatorship order by FDIC. Failure to do so could render the letter of credit worthless and leave the Beneficiary without a viable course of action to re-establish the deposit or other security.

While beyond the scope of this article, the type of account in which the proceeds are held, in the case of a tenant security deposit, should be carefully considered in order to minimize potential bankruptcy risks.


FDIC May Repudiate Letters of Credit from Banks in Receivership

US banks and thrifts are failing at an alarming pace, and the Rating Agencies have dramatically downgraded the credit ratings for numerous institutions whose financial strength would have been unquestioned just a year or two ago. For banks, 2008 was a very painful year. In 2007, only three banks were placed into receivership; in 2008, 25 failed, an increase of more than 800 percent.

2015 is looking ominous for the banking industry, and many experts predict that large numbers of banks and thrifts will be placed under government control throughout the year. Meanwhile, the Rating Agencies will downgrade ratings as institutions’ prospects dim. While the government agencies often transfer assets and liabilities of a failed institution to a successor, the government has the statutory right to repudiate all “burdensome” contracts – including letters of credit – when it places a bank or thrift under government control.

FDIC has recently reminded letter of credit Beneficiaries – most notably commercial landlords – that FDIC may not honor undrawn standby letters of credit issued by banks that have been placed under government receivership or conservatorship. In other words, the FDIC has announced that it can repudiate undrawn letters of credit, and that no damages against the Issuer will be available to the Beneficiary, unless the conditions for drawing were fully satisfied before the receivership or conservatorship occurred. Because the United States Supreme Court has held that letters of credit are typically not deposits, the Beneficiary is not protected up to the FDIC insurance limit for deposit accounts – currently $250,000 – if a letter of credit is repudiated. Letters of credit can, of course, be assumed by any bank that accepts the obligations of a failed institution, but the critical message here is that this may occur at the sole discretion of the FDIC and the acquiring bank. FDIC has wide latitude in the way it structures the transfer of assets of a failed institution, so even if a failed bank “merges” into a healthy institution, letters of credit may still be at risk.

Meanwhile, in the event the Issuer is placed under FDIC control, any cash deposited with the Issuer by the Account Party as collateral for a letter of credit will likely be considered a deposit account that is insured only up to $250,000.


What to Do If You Are a Letter of Credit Beneficiary

First, check all agreements between you and the Account Party to identify the requirements that the standby letter of credit and the Issuer must satisfy.

Second, frequently check all standby letters of credit you may be holding to confirm maturity dates, conditions for draws and, most importantly, the identity of the Issuer. To determine whether the Issuer meets the standards appearing in your agreements with the Account Party, you can easily check the ratings on the rating agencies’ websites, as applicable – www.standardandandpoors.com; www.moodys.com, and www.fitchratings.com. If it appears that the Issuer’s rating has fallen below the specified standard, consider advising the party who is required to maintain the letter of credit of such failure in light of its contractual duties. Be sure to follow the document’s notice requirements, and check the default provisions to determine whether the party is entitled to notice and a right to cure. FDIC does not publish its FDIC Watchlist; if you have concerns about any particular institution, please note it is unlikely the FDIC will either confirm or deny that institution’s status.

A notice to a tenant might provide as follows:

Dear Tenant:

In accordance with the requirements of Section __ of the Lease dated ____, by and between ABC, LLC (“Landlord”) and XYZ, Inc. (“Tenant”), ________ Bank, the issuer of the letter of credit required under your Lease, no longer meets the LC Issuer Requirements specified therein. Accordingly, pursuant to the requirements of the Lease, Tenant has [five (5)] days from the date of this letter to deliver a replacement letter of credit from a bank that meets such requirements, failing which, Landlord has the right to present the existing letter of credit for payment and to hold the proceeds pursuant to your Lease.

Very truly yours,

[Landlord]


Third, as noted above, many standby letters of credit permit a drawing in full in the event that the Issuer fails to meet the requirements of the underlying contract and no replacement letter of credit has been delivered within a specified time period. When a Beneficiary holds a standby letter of credit with such language, the beneficiary should consider presenting a draw before the Issuer is placed under receivership or conservatorship. Look carefully at notice and cure provisions in the underlying document (such as the lease), and the letter of credit itself, to ensure that no liability will arise from such an action. Under applicable law, the Issuer may have as long as five business days to honor a draft for payment, so quick and decisive action will be imperative.

Fourth, in some instances, letters of credit are held in an escrow arrangement by a title company, bank or other entity. Because you should never assume that the escrow agent will be monitoring the Issuer’s financial condition (even if the escrow holder has agreed to do so), review the applicable terms and conditions to ensure that the appropriate protections are in place. Fifth, to the extent that you are involved in documenting a new transaction, review carefully how the letter of credit provisions in your documents work, and be mindful of the fact that bank ratings can change dramatically in the course of a day. In addition, from a drafting standpoint, counsel will want to ensure that the documents do not grant back-to-back notice and grace periods that could make decisive action impossible. A tenant may be unable, as a practical matter, to replace a repudiated letter of credit if the Issuer is subject to a receivership or conservatorship action and the FDIC does not transfer the Issuer’s obligations to a successor bank.


How does leasing bank guarantees work?

Collateral Transfer is where a Provider agrees to utilise his assets to the benefit of a third party, namely the Beneficiary (or Principal). This is done through a Collateral Transfer Agreement and involves the ‘transfer’ of the original asset (the ‘collateral’) into a new security that the Beneficiary can utilise. Hence the term “Collateral Transfer”.

This is done by the Provider of the original or underlying asset pledging the asset to the facility bank (the Issuing Bank) in order that the Provider can instruct the remittance of a Bank Guarantee to the Beneficiary and his Recipient Bank.
The Bank Guarantee that results can be used in any way by the Beneficiary. The underlying asset pledged to the Issuing Bank may be cash, bonds, stocks, gold or other assets (or often a combination of many) and is provided by the “Provider”.

The Provider will be a private equity or investment group or a collateral management company making investments on behalf of its clients. A Provider will often receive the assets through private label funds set up for the purpose, or from hedge funds, pension funds or high net worth individuals and family offices.

Provider’s are able to offer its investors good returns on non-liquid assets by offering Collateral Transfer facilities. This makes good opportunity to investors that wish to seek additional returns by placing their assets with the Provider. The Provider then in-turn seeks suitable clients (beneficiaries) to receive Collateral Transfer facilities. The Contract Fees paid to the Provider by the Beneficiary for the use of the bank guarantee are then divided amongst the investors (the owners) of the original underlying asset as a return. A portion of course retained by the Provider as their management fee. This allows investors to obtain good annual returns on assets they would otherwise not be able to invest. For example, valuable artworks, real estates, stagnant capital, etc.

The Provider will use his bank relationship to pledge these assets to the Issuing Bank and have them issue a Bank Guarantee to the Beneficiary for a given term (usually 12 months renewable terms). The Beneficiary will pay to the Provider a Contract Fee for the use of the Bank Guarantee over the term.

The facility is governed by a Collateral Transfer Agreement (commonly referred to as a CTA). Each CTA is bespoke to the specific transaction. This Agreement binds the Provider to issue the Guarantee to the Beneficiary for the given term and binds the Beneficiary to accept the Guarantee and to pay the Contract Fee to the Provider for its use. It is of course known to all parties that the Beneficiary will use the Bank Guarantee to raise credit and will therefore encumber the Bank Guarantee (i.e the lending bank will lien it as security). This is referred to as ‘monetisation’ of the Guarantee. Whist this is of course acceptable to the Provider, the Beneficiary will need to make a declaration that they adhere to remove any encumbrance over the Guarantee 5 days prior to the Bank Guarantee expiry date. Therefore the Beneficiary must make his own arrangements with his bank (or the bank lending the credit against the bank guarantee) to repay any loans secured on it. Otherwise the Beneficiary will be in breach of the CTA. This is referred to as the ‘exit strategy’, i.e. how the Beneficiary will exit the contract and repay the debt secured on the Guarantee.

Commonly, the Beneficiary will refinance with the lending bank to remove any encumbrance over the guarantee at expiry, or choose to renew the CTA for a further 12 month period. If the Beneficiary fails to repay any loans secured on the Guarantee at expiry, the lending bank will call it and the Provider will lose his pledged assets. In these cases, the Provider will take recourse of debt recovery against the Beneficiary. It is therefore required that the Beneficiary is reputable and financially sound and that is why there is the initial due diligence and acceptance period before we are able to offer Terms. Only when the Beneficiary is accepted are Terms offered.

Therefore, to exit the contract successfully, the Beneficiary will utilise loan funds raised on the Guarantee for commercial purposes. Rather like a bridge loan, the Beneficiary will need to receive his investment or liquidate his project prior to the expiry of the Guarantee, allowing him to clear and remove any encumbrance over it.

It is common to find that a Beneficiary will use Collateral Transfer facilities to either participate in trade positions where his returns are received prior to expiry of the bank guarantee, or for property development projects where liquidation or refinance of the bricks and mortar once construction is complete will serve as his exit strategy. This fairs well with these types of facilities and are preferred by Providers.

If you wish to discuss any details concerning these facilities, please do not hesitate to contact us by telephone or by selecting contact us / general enquiry at the top.


MONETIZATION PROGRAM FOR LEASED AND OWNED INSTRUMENTS

Introducing a Special Non-Recourse Monetization Program for Leased and Owned Instruments from most world Banks including Low Rated and Non Rated Banks. This program will provide a 35 % LTV non-recourse monetization for Bank Guarantees and Stand By Letters of Credit that CAN/MUST be delivered by MT-760.

We have found that the two biggest challenges to the completion of a successful transaction are as follows:

1. Fraudulent Instrument Providers- The number of scam artists and fraudsters that purport to be legitimate Instrument Providers is currently at epic proportions. As a result of this, many well meaning and good faith clients have lost considerable monies to these phony Instrument Providers.

One main scheme of fake providers is to assert to their clients and to the monetizer that they, in fact, did send out a Swift (MT-799 and/or MT-760) when no swift was ever received by the Monetizer's receiving Bank. This has caused untold delays in ascertaining whether the Swift was ever sent as a detailed search is usually undertaken to find this 'missing' Swift. Finally, after a lengthy effort, it is revealed that No Swift was ever sent and the client is left with no instrument and often times, at least Several Hundred Thousand Dollars poorer. In addition, the monetizer's own relationship at their receiving Bank is damaged due to the fact that the monetizer was working with a Fraudulent Instrument.

As a result of this epidemic of fraudulent instruments, a procedure that our monetizer has put in place requires direct e-mail Banker to banker communication from the Instrument Provider's Sending Bank's bank officer to the Receiving Bank's bank officer stating that the Sending Bank is RWA to issue a BG or SBLC by MT-760. The Bank Officer at the receiving Bank will reply by e-mail that they are RWA to receive the instrument. All e-mail communications must be done on a Banker-to-Banker basis using Bank e-mail addresses. In addition, the Bank contact phone number of the Sending Banker is obtained and the e-mail addresses and Sending Bank Officer's phone number are validated by calling the Sending Bank's main number.

For Fresh Cut Instruments we also ask the client to provide a copy of their contract with their Instrument Provider so that we can check the Instrument Provider in our ever growing data base to review any previous experience we have had with this Instrument Provider.

Our experience has been that when an Instrument Provider or client is unable to unwilling to follow this procedure, the likelihood of the instrument being fraudulent is very high and we will immediately pass on the file.

2. Banks inability to send a MT-760; As our program will monetize instruments from Low Rated as well as Non-Rated Banks, we have had extensive experience in monetizing instruments from all kinds of Banks. A main problem that we have faced is the issue of the Sending Bank's inability to actually send a correct and proper MT-760 to the receiving Bank. This problem has often occurred when a Smaller Sending Bank is using a correspondent Bank to deliver the MT- 760.

As a result, we have developed our own data base of Banks and our past experience with a specific Bank will determine our appetite to receive more paper from a particular institution.

Many people refer to this as sblc funding or sblc financing since you are essentially obtaining cash on the basis of the sblc or bank guarantee. This process allows you to:

Monetize instruments for cash
Monetize instruments for buy/sell platform entry
Monetize instruments for both cash and buy/sell platform entry


SBLC Monetising Program Highlights

-$50 Million to $10 Billion USD
-The letter must be from an A or AA rated bank.
-Must contain the following 5 phrases: ”Irrevocable”, “divisible”, “transferable”, “assignable” and “unrestricted”.
-1-3 year term
-Interest only loan
-5-8 day closing
-85-97% of face value advance

SBLC/BG $10-50 Million Program Highlights

-The letter must be from an A or AA rated bank.
-Must contain the following 5 phrases: ”Irrevocable”, “divisible”, “transferable”, “assignable” and “unrestricted”.
-1-3 year term
-Interest only loan
-5-8 day closing
-85-97% of face value advance

Case Study-SBLC Monetising or SBLC Monetisation:

If you have a bank guarantee or sblc we can help. In this case study the client needs $50M - $500M to secure the purchase of land needed for a project, real estate project, purchasing of hotel etc. Client has a Cash Backed SBLC from a top 25 bank, an AA rated bank, or EU major bank. Client submits SBLC for monetisation and gets 85% - 97% of the SBLC's face value.


Also find questions and answers with more info on SBLCs, PoFs, BGs, Monetisation, etc.:
➤SBLC, BG, Monetisation Request Form
➤Not sure? Get a FREE Consultation





Asberry Financial Services
SBLC Request Form

Use the form below to apply for a
SBLC, BG, PoF, and/or Monetisation:
Try to be as accurate and detailed as possible
ATTENTION:
After submitting this form you will be taken to a page and sent an automatic email (check spam folders) with detailed step by step instructions of what to do next.

Austin, Texas is most likely to get Amazon's $5 billion headquarters, according to the data

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  • Moody's Analytics ranked what it believes to be the top contenders for Amazon's second headquarters.
  • The analysts point to Austin, Texas as the most likely city, based on several of the company's requirements.
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