Standby Letter of Credit (SBLC) OR Bank Guarantee (BG)

 

This topic is about Standby Letter of Credit (SBLC) & Bank Guarantee (BG) which is better between?
Please check our older post about THE USES OF STANDBY LETTER OF CREDIT (SBLC): www.sblcbrokers.com
Today we will be talking about  Letter of Credit and Bank Guarantee. Standby letters of credit and bank guarantees are both methods of providing assurance to a vendor of payment on credit. They are often used for international trade transactions where the financial risk is high. A bank guarantee is a commitment by a bank to pay its client’s obligation up to a certain amount, while standby letter of credit is a more formal document that details the obligations of both parties. 

Standby Letter of Credit

A standby letter of credit serves as a secondary payment method for a bank’s client should the client fail to pay the vendor an agreed-upon amount. Neither party expects to draw upon an SLC. Indeed, doing so can damage the creditworthiness of the bank client. To execute an SLC, both parties agree to the terms of a transaction. If the vendor requests an SLC, the buyer applies to his bank, who approves it upon the buyer’s credit rating. Thus, the risk assumed for payment is transferred from the vendor to the issuing bank.

Bank Guarantee

A bank guarantee acts similarly to a line of credit, except that a line of credit can be drawn upon at will by the bank’s client. A bank guarantee is used only if the client does not pay its vendor an agreed-upon amount. U.S. credit institutions are forbidden from assuming guarantee obligations, and therefore most international transactions require a standby letter of credit.

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SBLC Brokers Ltd is a leading Financial Services firm that is headquartered in the UK to provide Non Recourse Loans, Business Loans, SME Loan, Investment Loan, Project Financing, Bank Guarantees, SBLCs, Letters of Credit, Monetization of BG/SBLC and funding for all kinds of viable projects locally and internationally. 

All our Bank Instruments come from Top Prime AAA rated banks such as Citibank New York, HSBC Hong Kong or London, Barclays bank London, Standard Chartered Bank London/Dubai/Hong Kong, UBS Switzerland, Welsfargo, Bank of America, Deusche Bank etc. We can help you to obtain financing for your business or projects, activate credit line, Issue & provide Letters of credit, BG or SBLC for you, provide loans against financial instruments, and monetize financial instruments.

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·         Loans: (Non Recourse Loans, Business Loans, Secured Loans, Unsecured Loans, International Project Financing)

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