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What is an SBLC?

Secured Cash Back SBLC

Standby Letters of Credit (SBLCs) offer several advantages for international trade, both in secured cash back and non-cash back scenarios. Here's a breakdown of those advantages:

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  • Financial Security Provides a guarantee to the beneficiary (typically the seller) that they will receive payment, enhancing trust in transactions.

  • Reduced Risk: Minimizes the risk of default from the buyer, as the SBLC can be drawn upon if the buyer fails to fulfill their payment obligations.

  • Facilitates Financing: Can be used as collateral for securing loans or lines of credit, improving liquidity for both parties involved.

  • Negotiable Instrument: The SBLC can be transferred or assigned to another party, providing flexibility in financing and payment arrangements.

  • Lower Costs: Generally lower fees than traditional letters of credit, making them a cost-effective option for businesses.

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                                                          Minimum Face Value 5 Million USD & Above 

Non-Cash Back SBLC

  • Operational Flexibility: Non-cash back SBLCs often require no upfront cash collateral, allowing companies to use their capital for other operational needs.

  • Improved Cash Flow: Since no cash is tied up, businesses can maintain better cash flow, using funds for growth and expansion rather than securing payment guarantees.

  • Wider Market Access: Companies can engage in international trade with partners who may require more assurances, thus opening up new market opportunities.

  • Enhanced Creditworthiness: Holding an SBLC can enhance a company’s credit profile, potentially leading to better financing terms with banks and other financial institutions.

  • Regulatory Compliance: In some cases, SBLCs can help meet regulatory requirements for international transactions, ensuring compliance with local laws and regulations.

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                                                  Minimum Issuance 0.50  Million USD to 50 Million USD 

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                                                 Issuing Banks - Subject to County specific / Availability 

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  1. Asia Pacific Investment Bank              

  2. BNP Paribas SA*                                                  

  3. Deutsche Bank AG*                                          

  4. J P Morgan Chase Bank*  

  5. CITI Bank NA*                                                          

  6. Society Generale*                                            

  7. Royal Bank of Canada*

  8. UBS Group AG*   

  9. UBB Investment Bank        

  10. ACE Investment Bank      

  11. Suisse Bank  PLC                                                    

  12. HSBC Bank PLC*                                                    

  13. Barclays Bank PLC

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Key features of Jade Corporate Advisors Collateral Transfer Fees, Costs & Charges:

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  • No upfront or advance charges

  • No Obligation Terms Offered

  • No fees or charges to Brokers

  • 100% Client Confidentiality

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**We want to deal with direct clients only**

How SBLCs Work for Loan Collateralization

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  • Issuance: A borrower requests an SBLC from their bank, which acts as the issuer. This SBLC guarantees payment to the lender (beneficiary) in case the borrower defaults on the loan.

  • Collateralization: The SBLC serves as collateral for the loan. Instead of using cash or physical assets, the lender can rely on the SBLC as a security instrument.

  • Draw Mechanism: If the borrower fails to meet their repayment obligations, the lender can draw on the SBLC to recover the owed amount.

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Benefits of Using SBLCs for Loan Collateralization

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  • Improved Credit Access: Borrowers can secure loans without needing to liquidate assets or provide cash collateral, making financing more accessible.

  • Increased Liquidity: Businesses can maintain their cash reserves, using them for operational needs rather than tying them up as collateral.

  • Risk Mitigation for Lenders: The SBLC reduces the lender's risk by providing a guarantee of payment, enhancing confidence in extending credit.

  • Flexibility in Terms: SBLCs can be negotiated and structured to suit both parties’ needs, potentially leading to more favorable loan terms.

  • Creditworthiness Enhancement: Having an SBLC can improve a borrower's credit profile, possibly leading to better interest rates and terms on loans.

  • Cost-Effectiveness: Fees for SBLCs are generally lower than those for traditional collateral arrangements, making them a more economical choice for securing loans.

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