A Standby Letter of Credit is a guarantee of payment by a bank on behalf of their client in which the bank fulfills payment obligations by the end of the contract if their client cannot. The SBLC is based on a contract between two business partners. There is no standard leasing process, leasing programs differ and each determined by the Provider. The Provider instructs the bank what to do therefore if you choose to go through a bank for an sblc service, you may be faced with lots of paperwork as they have policies and guidelines to adhere to.

 A standby letter of credit is often required in international trade to help a business obtain a contract. Since the parties to the contract do not know each other, the letter promotes the seller’s confidence in the transaction. It is seen as a sign of good faith since it shows the buyer’s credit quality and ability to make payment for goods or services even if an unforeseen event occurs. Letters of Credit (LC) can be classified as either documentary Letters of Credit or Stand By Letters of Credit (SBLC/SLOC). A Documentary Letter of Credit allows payment to the seller. It facilitates the movement of goods in an international transaction. In trade finance, Letters of Credit is one method of payment used to reduce risk in global transactions between a Buyer and Seller of goods. They are mainly used for commodity and industrial use as performance bonds. 

The two main types of SBLC are:
a. Financial SBLC: The financial-based SBLC guarantees payment for goods or services, as stipulated in the agreement.
b. Performance SBLC: A performance-based SBLC guarantees the completion of a project within the scheduled timelines. If the bank’s client is unable to complete the project outlined in the contract, then the bank promises to reimburse the third party to the contract a specific sum of money.

When setting up an SBLC, the buyer’s bank performs an underwriting duty to verify the credit quality of the buyer. Once the buyer’s bank is satisfied that the buyer is in good credit standing, the bank sends a notification to the seller’s bank, assuring its commitment of payment to the seller if the buyer defaults on the agreement. It provides proof of the buyer’s ability to make payment to the seller. Genuine SBLC Providers can be hard to come by. The banks don’t advertise SBLC's, Only because they are not allowed to do so. Standby Letters of Credit are provided by high net worth clients with large cash holdings in an account at the Bank. High net worth clients are usually hedge funds, private equity, pension funds and large corporations etc. We issue and manage these high net worth clients instruments. Our clients are based in Switzerland, USA, London, UAE, Turkey, China, Japan, and most European countries. We have the credit line capacity running into billions in the most recognized currencies (Euro, Pounds and Great Britain Pounds) respectively.

Financial SBLC Are often required when performing international trade or other large purchase contracts under which other forms of payment protections (such as litigation in the event of non-payment) can be difficult to obtain.