Selecting the right Standby Letter of Credit (SBLC) provider is crucial for safeguarding your business’s financial interests. This decision should be based on your specific business requirements, the nature of your transactions, and your financial strength.
If your company has a high revenue turnover and a strong credit history with your bank, obtaining an SBLC from a local bank can be particularly advantageous.
Local banks that are familiar with your financial standing may offer more favorable terms, lower fees, and expedited processing times. They can also provide personalized service and a deeper understanding of your business needs, which can enhance the efficiency and effectiveness of the SBLC issuance.
We can also assist by issuing SBLCs on your behalf, offering flexible solutions tailored to your financial objectives.
Objective — secure a bank-issued Standby Letter of Credit (SLOC) that satisfies the counter-party while keeping your working capital intact. Where collateral capacity is tight, Financely arranges:
- Asset-based loans against receivables, inventory, or hard assets
- Equity injections from professional investors
- Sponsor issuance, subject to due diligence and KYC
All SLOCs are issued by recognised banks and can be confirmed if required. Final selection of the issuing institution depends on jurisdiction, sector, and credit appetite; it is determined during negotiations, not at enquiry stage.
First step: complete the screening form below. The form is an information intake only; no fees are payable until both parties execute a mandate letter.
Bank-Preferred Ticket Size
USD 5 million – 100 million
per SLOC provides optimum pricing and credit bandwidth.
Regulatory Framework
SLOCs are typically issued subject to ISP 98 (ICC Pub. 590) or, where required, UCP 600 (ICC Pub. 600). Choice of rules is agreed case-by-case.
End-to-End Governance
FINRA-licensed chaperone available for any securities transfers; full AML/KYC alignment with Wolfsberg-ICC-BAFT trade-finance principles.
PROCESS OVERVIEW (TYPICAL 4–12 WEEKS)
Screening form
Complete the information intake form.
Indicative response (24h)
Preliminary feedback within one business day.
Mandate, KYC, retainer (Week 1–2)
Execute mandate and begin diligence.
Collateral / onboarding (Week 2–6)
Arrange collateral capacity or sponsor onboarding.
Credit committee (Week 6–10)
Issuing-bank approval and draft wording.
Final issuance (Week 10–12)
SWIFT MT760 / BG delivered and confirmed if required.
Frequently Asked Questions
SLOCs are usually issued under ISP 98. In some jurisdictions, parties elect UCP 600; this is indicated in the credit text.
Likely to qualify: turnkey EPC contracts, project-linked performance obligations, commodity trade with confirmed off-take, secured import finance, and performance bonds where call risk is demonstrably low.
Unlikely to qualify: speculative commodity positions, cryptocurrency-related trades, business involving sanctioned parties, and projects with unresolved environmental or licensing issues.
Issuing banks treat a standby LC as a secondary obligation. High expected call frequency increases capital allocation and can render a deal uneconomical.
Preference can be indicated, but final selection depends on ticket size, jurisdiction, counter-party, and available credit lines. All issuers are regulated and clear through established correspondent networks.
No. The retainer covers third-party legal, valuations, and due-diligence expenses already incurred. Engagement proceeds only after both parties accept this cost allocation.
Amendments to an issued SLOC require consent from the issuing bank, any confirming bank, and the beneficiary, in line with UCP 600 Article 10. Additional underwriting and fees may apply.
Greenstone follows the Wolfsberg-ICC-BAFT Trade-Finance Principles and runs sanctions, AML, and adverse-media screening on all parties.
Secured VS Unsecured SBLC
Collateralized SBLC
When dealing with most banks, they will ask you to have 100% collateral to back up the Letter of Credit. This means you need to secure the credit with assets or cash equivalent to the value of the credit.
Be mindful that banks will also charge extra fees for using the Letter of Credit, usually between 2% & 6% annually, plus some initial issuing charges.
Knowing these costs is important to use SBLC effectively for your business needs.
Unsecured SBLC
In some rare situations, if you don’t have enough collateral, a bank might still issue an unsecured LC if they think the transaction is low risk.
In case the bank insists on collateral and you don’t have it, you will need to find a third party to provide it.
It’s crucial to understand these aspects to avoid any unforeseen complications in your business transactions.
Unanswered Questions? We’re Here To Help!
We want to know your needs exactly so that we can provide the perfect solution. Let us know what you want and we’ll do our best to help.