SBLC and BG by Subcontracts India-Trusted & Tested
Explore alternative funding options and financial solutions. If you are looking to obtain a Standby Letter of Credit (SBLC) or Bank Guarantee (BG) either through purchase or lease, you have arrived at your final destination. We are experts at handling issuance of SBLCs/BGs and we have done it many times over. Airline Operators, Miners, Investment Bankers, Project Owners, Oil & Gas Traders, Commodity Traders, etc. have successfully obtained SBLCs/ BGs through us. If you follow our procedure, it is likely that you might obtain an SBLC / BG provided you are financially capable to transact and possess the right business credentials. We do not entertain brokers or intermediaries.
Monetizing a bank instrument such as SBLC/BG means raising finance (either cash or credit line) against it. For SBLC/BG to be monetized, it is extremely important that the instrument is worded (verbiage) specifically for the purpose. By monetizing, the SBLC/BG is converted into legal tender. We can help monetize any SBLC/BG (issued by a rated Bank from our pre-approved list) to be used for either non-recourse project funding, move them into various trading platforms quickly and easily as well as creatively incorporating them into financing certain development projects.
Our Leased SBLC Monetizing Program allows you to:
Monetize SBLC/BG for cash as well as for raising a credit line
Monetize SBLC/BG for buy/sell platform entry
Monetize SBLC/BG for both cash as well as buy/sell platform entry
The most important element of this monetizing program is the documentation that acts as security and proof that the borrower is the beneficiary to a debt that is collectable on a specified date. It is integral that trade firms and exports strive to only accept secure negotiable instruments, which are unconditional, irrevocable and freely transferable, as evidence of the debt. Instrument such as these are sold without recourse, which gives the exporter the beneficial option of selling them and effectively removing themselves from any further involvement with the financial aspects of the transaction, eliminating risk and burdens of administration and collection.
We provide SBLC/BG monetization services for clients looking to discount, monetize, or create an immediate Non Recourse loan against a leased SBLC. Under normal circumstances, to lease an SBLC, the lessee needs to pay the Leasing Fee (generally between 8% to 13% of Face Value of the SBLC/BG) plus another 2% intermediary commission. However, under this program, the Leasing Fee and the commissions (both for leasing the SBLC/BG as well as monetizing it) amounting to 4% of the instrument face value of the SBLC/BG, do not need to be paid by the lessee/borrower and is actually deducted from the non-recourse loan prior getting it disbursed to the applicant/ borrower. As a result of this, the applicant/borrower's exposure to risk is minimized substantially.
We do not monetize an SBLC/BG if it is not issued by a rated Bank, Most people often confuse the term NOT RATED with the fact that some SBLC/BG issuing entities are not real banks, but private companies offering consulting services, and sometimes, issuing documents that are beyond their legal and financial capacity, hiding themselves behind the excuse that because they are an “offshore bank” or a foreign corporation or because they only deal with foreigners, they do not need to hold a banking license or comply with reserve deposits with the Central Banks of the jurisdictions from where they operate. The reality is, a rating is just an opinion given by one person or company, about the credibility of the bank or institution what the rating is about; but this has almost nothing to do with the truth, that the documents in question are worthless not because of the credit rating of the issuer, but because the issuer is not a bank.
For political reasons, most Eurozone regulated banks avoid, as much as they can, to work with banks of certain countries. Trying to monetize an instrument issued by a Latin American country, or even China is almost impossible!! Even Europe is not free of that problem; for example, while the list of embargo banks from Russia and Ukraine is very small, most Eurozone regulated banks prefer to not accept as collateral instruments issued by any Russian or Ukraine based banks, they say it is to reduce their risks as much as possible, and to avoid working with banks that while not currently on the embargo list, can be included in said list at any time. Some other countries have strong, reliable and highly praised banks with excellent credit ratings, like Azerbaijan, yet almost no Eurozone regulated bank wants to work with instruments issued by them; this limits the ability of most monetizers to work with instruments from banks of these countries regardless of the credit rating of the bank.
Huge complications exist in the monetizing process especially where the Instrument Provider and the Monetizer are two different entities. To avoid this, we employ direct banker to banker communication over the SWIFT Platform (from the SBLC/BG Provider’s Issuing Bank’s officer to the Beneficiary's/Monetizer's Receiving Bank’s officer) clearly stating via SWIFT MT799 that the Issuing Bank is ready, willing and able (RWA) to issue SBLC/BG by MT-760 (SWIFT code for SBLC/BG). The Bank Officer at the Receiving Bank will reply via a MT799 RWA message and a subsequent MT799BPU (Bank Payment Undertaking) message confirming they are not only RWA to receive the instrument but will also pay for the instrument once it arrives over the SWIFT platform via MT70.
Another complication is some Bank’s inability to 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. SBLC/BG has no value if it is issued by companies that are not licensed banks. A bank is a financial institution or corporation, authorized by a government, to provide banking services to the general population, often by allowing them to receive deposits, extend credit, and other financial services restricted to be provided only by banks. Many of the SBLC/BG issuing entities do not currently hold a banking license from any country in the world. Do not get confused by words like “bancorp”, “credit”, “finance”, “trade”, “embank” etc. Not a single one of the such entities is an actual bank. These entities do not use the words BANK, BANCO, BANQUE, BANKA, БАНК and some other translation for it, because said words are restricted in almost all countries, to be used only by licensed BANKS and not consulting firms or other type of businesses. Now, by its own nature and definition, a “BANK GUARANTEE” (SBLC/BG) can only be issued by a BANK.
Major complications also arise due to the involvement of scammers/ fake providers who 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 causes 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.
To avoid such complications mentioned above, we have devised this safe and efficient Leased SBLC Monetization Program where we work with the SBLC/BG Provider and a Monetizer working as a team of two independent entities.
This coming together of the Instrument Provider and Monetizer has resulted in devising and fine tuning a seamless program where the Client benefits the most. Once an application is accepted and evaluated as viable, the process gets initiated by the Client depositing our all inclusive Origination Costs (please see below table) to our nominated bank account for covering expenses towards the following:
Assessment of Applicant’s Company and Project
On site Due Diligence (DD) by authorized agency
Bank Processing and Transmission Charges
It is important to understand that this Leased SBLC Monetization Program is effective for those applicants who have a genuine and verifiable business that needs raising finance for a viable project or for obtaining a credit line for international trade activities. Although this program leads to non-recourse lending, we conduct a thorough due diligence of the applicant’s company as well as his proposed project or trade deal.
TERMS AND CLOSING PROCEDURE
- Client submits CIS (Client Information Sheet) with all required information to Subcontracts India. Please note all information must be accurate, correct, and verifiable. Over 95% of the applications we receive are rejected by our compliance department due to insufficient/ false/ misleading information filled by applicants.
- After our internal evaluation, if the application is approved, Client deposits Origination Costs (please see table below) in Subcontracts India's bank account.
- Within 3 working days after the deposit is received by Subcontract India’s Bank, an SBLC/BG Leasing and Monetization Contract Agreement is signed between the Client and the us (“Both Parties”).
- Client Issues Power Of Attorney to us to apply on behalf of the Client for the Leased SBLC/BG to our pre-approved Instrument Provider with the declaration that applicable Leasing Fee and Intermediary Commissions will be deducted from the monetized amount (as per Loan To Value (LTV) agreed between “Both Parties”) and will be remitted to the Instrument Provider upon monetization of the Instrument.
- Our Bank sends MT799 BPU (on behalf of the client) to the Provider's Bank.
- Provider’s Bank issues MT760 (as per Appendix C on DOA) to our Bank.
- Our Bank verifies & confirms the MT760 and instructs for remittance to the Issuing Bank via MT 103.23 (as per Appendix B) within 10 banking days.
- Original Copy of SBLC/BG is sent by the Provider via Bank Bonded Courier to our Bank.
- Within 5 banking days after receiving the original hard copy of the instrument, our Bank will SWIFT wire transfer (MT103) the monetized amount of to the applicant's bank after deducting SBLC/BG Leasing cost (XX% which will be paid to the Provider's Bank) and intermediary commissions (4% which will be paid as per IMFPA)
- SBLC/BG is then used by us through the validity period and is returned to the Provider 15 days prior its expiry.