Standby Letter of Credit (SBLC)

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Standby Letter of Credit (SBLC)

A letter of credit is a payment guarantee from a bank that is separate from the sales or other contracts that it is based on. It’s a technique of lowering the financial risks that come with moving products. More precisely, it is a written undertaking by a bank (issuing bank) given to the seller (beneficiary) at the request of the buyer (applicant) to effect payment — that is, to make a payment, or to accept or negotiate bills of exchange (drafts) — up to a specified amount, against stipulated documents, and within a specified time limit.

Why Use a Letter of Credit?

When the critical topic of payment method is being discussed during discussions between the buyer and seller, the requirement for a letter of credit is a consideration. Payment can be made in several ways: by the buyer sending cash with his order; by open account, where the buyer pays after receiving the goods at a predetermined time; or by documentary collection through a bank, where the buyer pays the collecting bank for the seller’s account in exchange for shipping documents, which in most cases include the document of title to the goods. The seller relies totally on the buyer’s willingness and ability to make payment in the aforementioned methods of payment.

When a seller has concerns about the buyer’s creditworthiness and wants to secure fast payment, the seller can insist on payment by irrevocable letter of credit in the sales contract. Furthermore, if the seller is unfamiliar with the bank issuing the letter of credit (issuing bank), or if the seller is shipping to a foreign country and is concerned about the issuing bank’s ability to honour its obligations, the seller can request that its own bank — or a bank of international repute — assume the risk of the issuing bank by confirming the Letter Of Credit, with the approval of the issuing bank.

A Letter of Credit is a payment guarantee from a bank that is separate from the sales or other contracts that it is based on. It’s a technique of lowering the financial risks that come with moving products.

There are various types of LCs, and Trade Finance Hub, a wing of Centwin Pte Ltd, arrange for its esteemed Clients as follows:

Providing a Letter of Credit improves the trustworthiness of the Clients in the International Trade Industry and makes their business transactions more competent and successful.

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Get the Best of Standby Letter Of Credit SBLC

Standby Letter of Credit SBLC is a payment guarantee. It is issued by a financial institution or bank that a user can use it for a range of financial and commercial transactions, local or international.

SBLC can be helpful in protecting the exporter or seller and a buyer or an importer in receiving the payment and receiving ordered goods in the agreed conditions.

Stand By Letter of Credit is a direct bank guarantee to pay the recipient on a customer’s behalf if the guarantee receiver defaults. Some of the common situations for which SBLC is used in are:

  • Delivery of goods on the basis of an open account,
  • Repayment of trade loans,
  • Securing payment for goods and services delivered by third parties

A Trusted Stand By Letter Of Credit Service

With over 6 years of experience in the financial and standby letter of credit SBLC industry, we have all the expertise in offering reliable and seamless SBLC services for businesses across industries and sizes. Get in touch with us and resolve your queries.

How Will You Get Benefitted?

We offer you the immediate solution for your standby letter of credit SBLC requirements. Our trade finance specialists will consult and guide you through the process and will deliver you a service beyond expectations that will cause you the minimum hassle.

We take time to understand your requirements and situation, while your consultants will ensure you will receive the best solution to get the most out of current cash flow.