Standby Letters of Credit
Your Trusted Partner for Standby Letters of Credit
Nehan Financing Broker excels in offering Standby Letters of Credit (SBLCs) as a reliable solution for international trade. An SBLC acts as a guarantee, ensuring payment to the beneficiary if the client does not fulfill their contractual obligations. This financial instrument provides a safety net, assuring sellers of payment even if the buyer defaults.
Unlike regular letters of credit focused on direct payment, SBLCs serve as a contingency, activated only when specific criteria, like non-payment or non-performance, are unmet. Our SBLC solutions are versatile, supporting various industries by providing financial security and flexibility in performance bonds, trade finance, and project financing. Trust Nehan Corp Advise to protect your transactions and secure your business interests.
Understanding the Benefits and Importance of SBLC in International Trading
Benefits of SBLC in International Trading
A Standby Letter of Credit (SBLC) serves as a critical financial safeguard, offering payment security and fostering trust in trade relationships. It guarantees that sellers receive payment even if buyers fail to fulfill their obligations, making SBLCs an essential instrument for managing risks in potentially volatile transactions. This assurance enhances confidence and stability in international trade, providing a reliable backup when dealing with high-risk deals.
When is an SBLC Important?
Standby Letters of Credit (SBLCs) are essential in international trade, especially when transacting with new or high-risk foreign partners. They provide assurance by guaranteeing that sellers are paid and buyers meet their commitments. This helps create a more secure and efficient global trading environment.
SBLC Issuance Procedure- Step By Step
SBLC Issuance Procedure:
1. In order to finalizing the draft , we need following documents/ information.
i. Filled-in Application form/ Proforma Invoice or Sales Contract
ii. Company Trade License
iii. Passport copy of the owner and shareholders
iv. Last three months bank statement
v. One-year audited financials
vi. Shareholding List
2. After acquiring all the above documents/information, we will assist the client in selection of the issuing bank/financial institution and assist in finalizing the draft for client’s review.
3. Upon receiving the draft copy of the instrument, client must thoroughly review the draft for any corrections, additions or removal of information. Should there be any amendments, we can assist in amendment of the draft accordingly to match clients’ preferences. Once the draft is approved by all the related parties, client will need to send us a copy of the draft with authorized signatory’ sign and company stamp on the draft as client’s approval along with an email confirming the same.
4. We will raise the invoice for the charges agreed and client will make the remittance against the invoice.
5.Only after we receive the payment for the raised invoice, we will assist on following with the issuing bank/financial institution consulted and provide assistance in issuing the instrument through swift/courier within 7 working days depending the issuing bank/financial institution policy.
6. Simultaneously we will assist the client in receiving the issued copy through email for reference and record keeping.
Note: The issuing charges would depend on the amount of the SBLC required, the type of the SBLC, the issuing bank selected for issuance and the beneficiary bank to which it is to delivered.