{"id":881,"date":"2024-06-22T14:57:18","date_gmt":"2024-06-22T14:57:18","guid":{"rendered":"https:\/\/grandcityinvestment.com\/?p=881"},"modified":"2024-06-22T14:57:18","modified_gmt":"2024-06-22T14:57:18","slug":"certified-standby-letter-of-credit-sblc-sloc-provider","status":"publish","type":"post","link":"https:\/\/grandcityinvestment.com\/en_US\/certified-standby-letter-of-credit-sblc-sloc-provider\/","title":{"rendered":"Certified Standby Letter of Credit (SBLC\/SLOC) Provider"},"content":{"rendered":"\r\n\r\n
\"SBLC

Certified Standby Letter of Credit (SBLC\/SLOC) Provider – Grand City Investment Limited<\/p><\/div>\r\n

What is a Standby Letter of Credit (SBLC\/SLOC)?<\/h1>\r\n

A Standby Letter of Credit (SBLC \/ SLOC) is a guarantee that is made by a bank on behalf of a client, which ensures payment will be made even if their client cannot fulfill the payment<\/strong>. It is a payment of last resort from the bank, and ideally, is never meant to be used.<\/p>\r\n \r\n\r\n\r\n

A standby letter of credit helps facilitate international trade between companies that don’t know each other and have different laws and regulations. A standby letter of credit can also be abbreviated SBLC or SLOC. A standby letter of credit is different from a bank guarantee. Grand City Investment Limited is a certified sblc provider with decades of experience and credibility.<\/p>\r\n\r\n\r\n

Grand City Investment Limited is are Certified Standby Letter of Credit (SBLC\/SLOC) Providers of BG\/SBLC.<\/h3>\r\n \r\n\r\n\r\n

Types of Standby Letter of Credit (SBLC\/SLOC)<\/strong><\/h3>\r\n\r\n

Financial standby LOC:<\/strong> An exporter sells goods to a foreign buyer, who promises to pay within 60 days. If the payment never arrives (and the exporter required the buyer to use a standby letter of credit) the exporter can collect payment from the importer\u2019s bank. Before issuing the letter of credit, the bank typically evaluates the importer\u2019s credit and determines that the importer will repay the bank. But if the customer\u2019s credit is in question, banks may require collateral (or funds on deposit) for approval.<\/p>\r\n\r\n\r\n

Performance standby LOC:<\/strong> A contractor agrees to complete a construction project within a certain timeframe. When the deadline arrives, the project is not complete. With a standby letter of credit in place, the contractor\u2019s customer can demand payment from the contractor\u2019s bank. That payment functions as a penalty to encourage on-time completion, funding to bring in another contractor to take over mid-project, or compensation for the headaches of dealing with problems. This is an example of a\u00a0\u201cperformance\u201d<\/em> standby letter of credit, and a failure to perform triggers the payment.<\/p>\r\n\r\n \r\n\r\n\r\n

Advantages of a Standby Letter of Credit (SBLC \/ SLOC)<\/strong><\/h3>\r\n\r\n

An SBLC helps ensure that the buyer will receive the goods or service that\u2019s 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 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.<\/p>\r\n\r\n\r\n

Also, small businesses can have difficulty competing against bigger and better-known rivals. An SBLC can add credibility to its bid for a project and can often times help avoid an upfront payment to the seller.<\/p>\r\n\r\n\r\n

The SBLC \/ SLOC is often seen in contracts involving international trade, which tend to involve a large commitment of money and have added risks.<\/p>\r\n\r\n\r\n

For the business that is presented with a SLOC\/SBLC, 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 to the buyer\u2019s bank for payment. Thus, the seller is guaranteed to be paid. Another advantage for the seller is that the SBLC reduces the risk of the production order being changed or canceled by the buyer.<\/p>\r\n\r\n\r\n

Uses Of Standby Letters of Credit (SBLC \/ SLOC)<\/strong><\/h3>\r\n\r\n

A standby letter of credit helps facilitate international trade between companies that don\u2019t know each other and have different laws and regulations. Although the buyer is certain to receive the goods and the seller certain to receive payment, a SLOC doesn\u2019t guarantee the buyer will be happy with the goods.\u00a0\u00a0\u00a0A standby letter of credit is most often sought by a business to help it obtain a contract. The contract is a \u201cstandby\u201d agreement because the bank will have to pay only in a worst-case scenario. Although an sblc\/sloc guarantees payment to a seller, the agreement must be followed exactly. For example, a delay in shipping or a misspelling a company\u2019s name can lead to the bank refusing to make the payment. There are two main types of standby letters of credit:A financial sblc\/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. Standby letters of credit can help establish trust with your business partners and be a powerful tool to help meet your business goals.<\/p>\r\n\r\n \r\n\r\n\r\n

KEY TAKEAWAYS<\/strong><\/p>\r\n\r\n\r\n