Issuance and monetization of Stand-by Letters of Credit (SBLC)
We help you secure all your international transactions by issuing and monetizing your stand-by letter of credit (SBLC or SLOC) that offers you a documentary guarantee to secure the performance of your commercial contract or your payment obligation.
Our Types of SBLC
Financial Standby Letter of Credit
A financial SBLC guarantees payment to the seller or the service provider for the goods or the services rendered as per the agreement within the stipulated time frame.
Performance Standby Letter of Credit
A performance SBLC is less commonly used compared to a financial SBLC. Performance SBLCs provide a guarantee of completion of a project as per the agreement or the contract. If the service provider fails to complete the project within a stipulated time frame, the bank steps in and reimburses the client.
Bid bond/ Tender SBLC
Bid bond/Tender Standby LCs act as a security against failure to complete the project once the applicant has been awarded the bid or the tender for it.
Counter SBLC
Also known as a backstop or a protective standby, Counter SBLC is a type of LC issued by a bank in one country to a bank in another country, asking them to issue a new standby LC to their local beneficiary.
Advance Payment SBLC
Advance Payment Standby LC provides security against one party’s failure to pay the other party’s advance payment.
Direct Pay SBLC
Direct Pay SBLCs act as a security in the instance of financial instability of the applicant. A direct pay standby is irrevocable.
Insurance SBLC
Insurance SBLC provides support to the beneficiary in case the applicant has committed for insurance or reinsurance but fails to do so.
Lease Support SBLC
A lease support SBLC is issued by the bank representing the tenant to the landlord. The bank generally takes a deposit as collateral for the SBLC. It pledges to pay the rent to the landlord in case the tenant is not able to do so.
If you have a specific request, don't hesitate to contact us at: info@invecta.mu
How does it work?
I
Conclusion of a commercial contract
Buyer and seller agree on the terms of the commercial contract.
II
Request for issue/emission
The buyer asks its bank (the issuing bank) to issue a stand-by letter of credit in favor of the buyer's bank (the receiving bank).
A communication in this sense is sent via a SWIFT message, known as SWIFT MT799, from the issuing bank to the receiving bank.
III
Issuance of the SBLC
By issuing and sending the SBLC via a SWIFT message, known as SWIFT MT760, the issuing bank undertakes to the receiving bank to settle in favor of the seller if the buyer fails to honor his payment, against presentation of the documents or copies of documents mentioned in the stand-by letter of credit.
IV
Notification
The receiving bank informs the seller of the terms of the letter of credit received.
If you have a specific request, don't hesitate to contact us at: info@invecta.mu
FAQs on SBLCs
Is an SBLC safe?
Standby Letters of Credit are highly secure documents that guarantee the payment for the goods in case the buyer defaults or is unable to pay as per the agreement.
How do you use an SBLC?
An SBLC is used as a safety mechanism in a trade to ensure that the agreement is honored by both parties.
Can an SBLC be confirmed?
Yes, an SBLC can be confirmed just like a normal letter of credit.
Can an SBLC be canceled?
The SBLC is an irrevocable document and hence it cannot be canceled without the consent of all the parties involved.
Can an SBLC be monetized?
Yes, SBLC can be monetized.
Can an SBLC be transferable?
An SBLC is transferable in that the beneficiary can sell or assign the rights to the proceeds from the SBLC, but the beneficiary remains the only party who can demand payment of the SBLC.
Can an SBLC be done without upfront payment?
Many companies and service providers claim that they do provide SBLC without upfront payment. However, experts call it a myth and say that there can be no SBLC without any upfront payment since the risk is too high.
Can an SBLC be discounted?
Yes, an SBLC can be discounted and is often considered a great investment instrument.
Is an SBLC legal
Yes, an SBLC is legal and fully operational when issued by banks or financial institutions certified by Central Banks.
Some Numbers
+10000
FILES PROCESSED
100%
SUCCESS RATE ON ACCEPTED FILES
+3000
COMPANIES AND BANK ACCOUNTS CREATED
+20
YEARS IN OPERATION
+82
STRUCTURES COVERING ALL JURISDICTIONS
+$600M
OF TRANSACTIONS IN 2024
+$230M
OF TRANSACTIONS IN CRYPTOS IN 2024
+400
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