How to Obtain a Standby Letter of Credit?

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SBLC Standby Letters of Credit Can Help Establish
Trust With Your Business Partners
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• The SBLC standby letter of credit is an
  irrevocable documentary commitment, separate from
  the sales contract, issued by the bank to a
  third-party beneficiary and promising to pay on
  behalf of the originator a specific sum of money
  against delivery of documents satisfying the
  terms and conditions of the SBLC.
• It can be used for import and export
  transactions.
• It is particularly suitable for existing business
  relationships where the two parties have already
  built up trust.

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• Financing for your small business isnt always
  easy to come bybut its important to look down
  every avenue of opportunity you might not be
  aware of one of the most powerful financing tools
  out there.
• Standby letters of credit can help your business
  in tough contractual and financial situations,
  making people more likely to sign contracts and
  do business with you.

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What is a SBLC Standby Letter of Credit?

• A SBLC standby letter of credit is a guarantee of
  payment by a bank on behalf of their client. It
  is a loan of last resort in which the bank
  fulfills payment obligations by the end of the
  contract if their client cannot.
• The standby letter of credit is never meant to be
  used, but prevents contracts from going
  unfulfilled in the event your company closes
  down, declares bankruptcy, or is unable to pay
  for goods or services provided. Standby letters
  of credit help prove a business credit quality
  and repayment abilities.

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Types of SBLC Standby Letters of Credit

• Performance SBLC standby letter of credit
• Performance standby letters of credit ensure the
  nonfinancial contractual obligations (quality of
  work, amount of work, time, cost, etc.) are
  performed in a timely and satisfactory manner. If
  these obligations are not met, the bank will pay
  the third party in full.
• Financial SBLC standby letter of credit

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How to Obtain a SBLC Standby Letter of Credit

• The standby letter of credit process is similar
  to that of obtaining a commercial loan, with a
  few key differences.
• As with any business loan, you will need to
  provide proof of your creditworthiness to the
  bank.
• However, the SBLC standby letter of credit
  approval process is much quicker, with letters
  often being issued within a week of all paperwork
  being submitted.

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• Unlike traditional loans, the bank will require a
  standby of letter of credit fee of between 1-10
  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 standby letter of credit
  without incurring additional charges.

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