Instrument & Service

Standby Letter of Credit (SBLC)

Trade Finance & Trade Goods Payment Security Solutions

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Guarantees the beneficiary that it will be paid from a creditworthy bank.

A letter of credit minimizes risk, maximizes control, and optimizes profits associated with international trade by making transactions simpler, smoother and safer for all sides.

Standby Letter of Credit (SBLC) Introduction

A guarantees payment to your vendor, Increases your business opportunities.

A Standby Letter of Credit is often used to provide security for an obligation, such as a lease or other long-term contract. Landlords may require a deposit or a standby letter of credit that guarantees payment from the issuing bank if a tenant falls in arrears. Often, large contracts may require at least one of the parties to have a standby letter of credit in place for the transaction to move forward. Basically, a standby letter of credit guarantees the beneficiary that it will be paid from a creditworthy bank if it’s unable to get paid by its counterparty in a transaction.

Express provides standby letters of credit, allowing transactions to happen that otherwise might be considered too risky by the receiving entity.

IMPORTANT: Standby Letters of Credit (SBLC) are normal forms of payment security or payment guarantee between a Buyer and Seller of Goods. Therefore the Standby Letter of Credit (SBLC) we provide clients are NOT MONETIZABLE and are NOT TRANSFERABLE like a Bank Guarantee (BG) would be. A Standby Letter of Credit (SBLC) is a specialist payment mechanism that is used for a specific buy and sells goods transaction, an SBLC cannot be monetized by a 3rd party.

Here’s an infographic to illustrate the entire process regarding the Standby Letter of Credit:

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Standby Letter of Credit (SBLC) Benefits

A letter of credit minimizes risk, maximizes control, and optimizes profits associated with international trade by making transactions simpler, smoother and safer for all sides.

Buyer Benefits

  • You may not have the necessary collateral requirements or relationship with the bank to get a letter of credit—but we do.
  • You don’t have to leave deposits with your suppliers, since your letter of credit will be opened for the full amount of the transaction—so your cash is not tied up or at risk while your supplier can often borrow against a letter of credit.

  • You may significantly increase your ability to do business with companies by bolstering your financial position with your suppliers.

  • You can build safeguards into the letter of credit, including inspection of the goods and quality control, and set production and delivery times. This gives you more quality control over your goods.

Seller Benefits

  • Payment is assured as long as you comply with the terms and conditions of the letter of credit.
  • The credit risk is transferred from the buyer to the issuing bank, which is obligated to pay even if the buyer goes bankrupt.
  • You have easier access to financing and are able to transfer all or part of the letter of credit to another party, e.g., to purchase raw materials.
  • Collection time is minimized, as the letter of credit accelerates payment of receivables, and foreign exchange risk is eliminated when it is issued in the currency of your country.

6 Reasons to use Siam Kredit
to deliver Letter of Credit (LC) for you

72 Hours Delivery

Deliver Standby Letter of Credit (SBLC) within 72 hours with documentation and payments.

Any Country

We will issue a Standby Letter of Credit (SBLC) for the import/export of goods from ANY country.

Any Currency

We will issue a Standby Letter of Credit (SBLC) in almost any currency

Lower Fees

Our fees for issuing Standby Letter of Credit (SBLC) are more cost-effective compare to others.

Less Restrictive

Our required control clauses for a Standby Letter of Credit (SBLC) are much easier.

Deposits Protection

ALL CLIENT DEPOSITS for Standby Letter of Credit (SBLC) receive 2 Tiers of Protection.

Standby Letter of Credit (SBLC) Costs

Costs are customized to each Goods transaction and therefore a exact quote can be provided once an completed application is received, but as a pricing guide:

Standby Letter of Credit (SBLC) Cost

9%Per Order
  • 72 Hour Delivery
  • Any Country
  • Any Currency
  • Lower Fees
  • Less Restrictive
  • 100% Deposits Protection
  • ** Required 5% in-advance for Draft (SBLC) and 4% upon (SBLC) completion.
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Standby Letter of Credit (SBLC) Processing Steps

Complete and return the Standby Letter of Credit (SBLC) Application and Pay the Application fee.

We will then create a draft of the Standby Letter of Credit (SBLC) for you and your supplier to review.

  • Once you and your supplier finalize the draft and sign off your acceptance of the draft (changes are free of cost).
  • We then issue you with an Invoice for the Standby Letter of Credit (SBLC), which you arrange to pay.
  • Upon receipt of your wire payment, we release the finalized Standby Letter of Credit (SBLC) to the bank for issuance and delivery.

Typically, the bank will issue the Standby Letter of Credit (SBLC) within 48 hours of release. Upon issuance, we email you a copy of the SBLC as transmitted by SWIFT, including the SBLC reference number. Your supplier’s bank should receive and confirm the Standby Letter of Credit (SBLC) transmission shortly thereafter.

Once the supplier has prepared and loaded the goods for transit, they must present the specified documents for that shipment to their bank. Their bank will transmit these documents to our bank. We will email you copies of the presentation (and all documents submitted by the supplier) for your review and approval.

Before our bank releases the original documents, we must receive payment for the presentation. Upon receipt of payment, we consign the documents to you and overnight them to your freight forwarder or whomever you designate – thus completing the transaction.

Receive up to 90% value of exports coverage.

We can Achieve Results others can’t because we understand from the Inside, what it takes to close a deal from the Outside!

“With many tears of Finance and Banking Industry Experience the Siam Kredit Executive Team understands the Banking Industry from the Inside because members of our Executive worked in the Financial Instruments Department of a World Top Bank.”

Apichaya

Siam Kredit, Financial Consultant Expert

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