03 Jun What Is BG/SBLC/SLOC and How Does BG SBLC Funding Work?
What Is BG/SBLC/SLOC and How Does BG SBLC Funding Work?
Standby Letter of Credit (sblc / sloc) and bank guarantee (bg) are bank financial instrument that is issued by a financial institution such as a bank. These financial instruments can be used to obtain loan or credit facilities from banks, they are also used for trade financing, foreign exchange as well as import and export transactions.
What Is BG/SBLC/SLOC and How Does BG SBLC Funding Work?
How a Standby Letter of Credit Works
A SLOC/SBLC is most often sought by a business to help it obtain a contract. The contract is a “standby” agreement because the bank will have to pay only in a worst-case scenario. Although an SBLC guarantees payment to a seller, the agreement must be followed exactly. For example, a delay in shipping or a misspelling a company’s name can lead to the bank refusing to make the payment.
There are two main types of standby letters of credit:
- A financial SLOC guarantees payment for goods or services as specified by an agreement. An oil refining company, for example, might arrange for such a letter to reassure a seller of crude oil that it can pay for a huge delivery of crude oil.
- The performance SLOC, which is less common, guarantees that the client will complete the project outlined in a contract. The bank agrees to reimburse the third party in the event that its client fails to complete the project.
The recipient of a standby letter of credit is assured that it is doing business with an individual or company that is capable of paying the bill or finishing the project.
Advantages of a Standby Letter of Credit (SBLC / SLOC)
The SBLC / SLOC is often seen in contracts involving international trade, which tend to involve a large commitment of money and have added risks.
For the business that is presented with a SLOC, the greatest advantage is the potential ease of getting out of that worst-case scenario. If an agreement calls for payment within 30 days of delivery and the payment is not made, the seller can present the SLOC /SBLC to the buyer’s bank for payment. Thus, the seller is guaranteed to be paid. Another advantage for the seller is that the SBLC/SLOC reduces the risk of the production order being changed or canceled by the buyer.
An SBLC helps ensure that the buyer will receive the goods or service that’s outlined in the document. For example, if a contract calls for the construction of a building and the builder fails to deliver, the client presents the SBLC/SLOC to the bank to be made whole. Another advantage when involved in global trade, a buyer has an increased certainty that the goods will be delivered from the seller.
How to Obtain a Standby Letter of Credit (SBLC / SLOC)
The standby letter of credit process is similar to that of obtaining a bank guarantee (BG), with a few key differences.
Grand City Investment Limited is the worlds number #1 premier provider of bank instruments such as standby letter of credit, bank guarantees, bg sblc. Our SBLC / SLOC approval process is fast and efficient, the instrument can be issued within a week of all paperwork being submitted.
How Much Does SLOC/SBLC Cost?
The SBLC/SLOC fee is 4% of the SBLC/SLOC amount. 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/SLOC without incurring additional charges. Standby letters of credit can help establish trust with your business partners and be a powerful tool to help meet your business goals.
Bank Guarantee (BG) is an irrevocable commitment by a bank to pay an agreed sum to the beneficiary in the event that the party requesting to the Guarantee fails to perform its obligations or liability to the beneficiary. At Grand City Investment Limited we are also able to provide you with immediate BG issuance on adhoc basis against Cash Margin or Fixed Deposit as collateral.
what is bank guarantee?
BG constitutes a formal and trustable source of undertaking to both buyer and seller, besides BG also allows customer to ease their cash flow in replacement for deposit requirement. Guarantees can be issued for various purposes. The main types are:
- Tender / Bid Guarantee/Bond
- This Guarantee/Bond is issued when you are going to bid for a tender of a contract and usually short term in nature.
- Performance Guarantee/Bond
- Performance Guarantee/ Performance Bond is issued in relation to the performance of the contractor against their obligations /works under the contract. The BG amount is normally about 2.5% or 5% of the contract value and valid until the completion of the contract/work or until the expiry of the defect liability / warranty period.
- Advance Payment Guarantee
- Issued to cover the advances made by the beneficiary to the applicant in which if the applicant fails to perform the contract, such advances made earlier will be claimed upon.
- Security Deposit Guarantee
- Security Deposit Guarantee is used as a deposit by the applicant to cover payment such as to Shell Petroleum, Vodaphone, and Customs and also for the supply of goods on credit term.
Features of Bank Guarantee (BG)
- BG must have a specific expiry and claim period
- Must have specific amount
- Format must acceptable to the bank
- Unconditional in nature
Benefits of Bank Guarantee (BG)
- Formal and definite source of undertaking for both applicant and beneficiary as the guarantee is issued by the bank
- Allows customer to ease their cash flow in replacement for deposit requirement
For example, The Fat Duck is one of the World’s Best Restaurants that wants to buy $3 million in kitchen equipment. The equipment vendor requires The Fat Duck to provide a bank guarantee to cover payments before they ship the equipment to The Fat Duck. The Fat Duck requests a guarantee from the lending institution such as Grand City Investment Limited keeping its cash accounts. Grand City Investment Limited essentially cosigns the purchase contract with the vendor.
THE WORLDS NUMBER ONE #1 GENUINE PROVIDERS OF BANK INSTRUMENTS, LEASE BG/SBLC/SLOC FUNDING
Grand City Investment Limited is a Hong Kong based Financial Services Provider that was incorporated on MAY 29, 1984 with Company Registration No. 0137353.
Our bank instruments, bg and sblc/sloc are issued from prime banks such as Barclays Bank London, Standard Chattered Bank, HSBC Hong Kong or any rated AAA bank of your choice. All our financial instruments are Cash-Backed and can be used as collateral to secure funding for projects, Discounting, Monetization, Trade Platforms and Private Placement Programs (PPP).
BG/SBLC Description:
1. Bank Instrument Type: Cash Backed Bank Guarantee {BG} / Standby letter of Credit (SBLC)
2. Face Value: USD/EUR 1Million (Minimum) to USD/EUR 50 Billion (Maximum)
3. Issuing Bank: Barclays Bank London, HSBC Hong Kong, Citibank New York, Deutsch Bank Germany or any prime bank.
4. Age: One Year and One Day (with rolls and extensions where applicable)
5. Leasing Price: 4% of Face Value plus 2% brokers commission (Applicable only if there are brokers in the transaction)
6. Delivery: SWIFT MT-760
7. Payment: MT103 Swift Wire Transfer
8. Hard Copy: Bank Bonded Courier within 7 banking days.
Why Chose Us for Business Loans, Lease bg sblc/sloc Providers
At Grand City Investment Limited we value your time and get straight to the point. Some companies will talk your ear off, we believe that action speaks louder than words so we prefer to be solely focused on results. We have a large network of world class banks which gives us the unique ability to create outcomes others can’t. We have been in the loan and financial instrument industry since 37 years ago.
When it comes to issuance, leasing, funding and monetization of any bank instrument such as bank guarantee, standby letter of credit, bg sblc, getting to the finish line is all that counts and that’s what we excel in at Grand City Investment Limited. We have been successfully closing deals for over 37 years, show us another company in this industry that can match our record?
What drives us: We have a passion to help emerging and growing companies succeed and help investors realize their goals. So we are Driven by Passion and Integrity
Below are a few of the things that make us unique and different from other companies.
1. We are a Government of Hong Kong Licensed Money Lender that Is Legally Registered in Hong Kong since May 29, 1984, that is 37 years of successful service and excellence.2. we issue bg, dlc and sblc from world class banks such as Barclays bank London, hsbc Hong Kong, Citi Bank, Credit Suisse, Standard Chartered Bank, Deutsche Bank or any prime bank of choice.3. We issue bg sblc in both usd or Euro Currencies, if you pay in usd we Issue in usd & if you Pay in Euro, we issue in Euro.4. Your Privacy is our Priority, we do not share your data or Business Transactions with third parties.5. Since 1984 till date No Customer has ever had a failed transaction with us. We have 99% success rate.6. Brokers Always Welcomed & Protected against possible circumvention.7. We have solutions for every customer in every industry.8. We are Efficient, Consistent, Transparent & Reliable
9. We are straight to the point10. Experienced and qualified staff
11. Extremely Satisfied Clients
12. No prepayment penalty
13. Fast Approvals Closing
14. No Hidden Fees or charges
NOTICE TO BROKERS/AGENTS/COMPANY REPS: We value and appreciate brokers who are direct to their clients. New brokers are welcomed and compensated with between 1% to 2% commission on every deal. Here are a few of the many benefits of being a Grand City Investment broker:
- Professional Support for brokers
- Earn between 1% to 2% Commission on Every Deal
- No Broker Chains, So please Be Direct to your clients
- Brokers are 100% Protected Against Possible Circumvention.
- Wide Range of Financial Instruments to choose from such as bg sblc issuance & Monetization Programs.
Telephone: +852 8191 7151
Skype: dr.williams09787
No Comments