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    Standby Letter Of Credit

    Standby Letter of Credit

    A standby letter of credit (SBLC) is a guarantee of payment issued by a bank on behalf of a client that is used as "payment of last resort" should the client fail to fulfill a contractual commitment with a third party.

    Standby letters of credit are created as a sign of good faith in business transactions and are proof of a buyers’ credit quality and repayment abilities.

    The institution issuing the SBLC performs compliance and brief underwriting duties to ensure the credit quality of the party seeking the letter of credit, then sends notification to the bank of the party requesting the letter of credit (typically a seller or creditor).

    Importantly, when requesting a SBLC, a business owner proves to the bank he is capable of repaying the loan. Collateral such as promissory notes, post-dated cheques and Escrow deposits will be required to protect the bank in case of default. The business owner must pay a SBLC fee for each year that the letter is valid. The negotiable fee is typically 5-10% of the SBLC value.

    Process Flows

    • Fill out the form available in the bottom right corner (Acquire your Trade Instruments) or contact us at this link. After completing the form, a sales team member in your region will contact you within a couple of days.
    • They will provide you with an E-KYC consent letter and invoice to start the KYC process. Please note that the E-KYC fee is non-refundable and non-adjustable against the issuance fees. We don't accept third-party payments.
    • After the E-KYC fee is paid, you will receive an email with the client KYC portal link to upload all the required KYC documents.
    • After submission, our third-party service provider will provide feedback and assist you in completing the process.
    • The buyer (Applicant) applies for an SBLC from EEB and submits an application, underlying agreements, and other necessary documentation.
    • EEB evaluates the creditworthiness of the applicant and assesses the risk involved in issuing the SBLC. This may involve checking the applicant's financial standing, business reputation, and ability to fulfil the SBLC's terms.
    • If everything is in order, EEB creates a draft instrument and sends a quote to you stating our charges.
    • Issuance fees are paid to EEB, and the SBLC is issued to the Beneficiary’s bank (advising bank) in the Beneficiary's country.
    • The beneficiary receives the SBLC and verifies that it meets the requirements specified in their contract or agreement with the applicant.
    • The beneficiary, by presenting the required documents, ensures that EEB makes payment to the beneficiary as per the terms of the SBLC.
    • If the SBLC expires without being drawn upon, it becomes null and void. Depending on the agreement, the SBLC may be renewed or extended if needed.
    • Once all obligations under the SBLC have been fulfilled (or expired without being utilized), the SBLC is closed, and any collateral or security provided by the applicant is released.

    EEB DISCLAIMER

    Euro Exim Bank Limited is a Group of Companies with Registered Office in Saint Lucia and a Representative Office in the United Kingdom. EURO EXIM BANK LTD (REGISTERED OFFICE) is a Class A International Banking Financial institution incorporated under the revised laws of St. Lucia. The license provides authorisation to conduct business with third parties across industries and geographies worldwide. This office is regulated by the Financial Services Regulatory Authority in St. Lucia, and does not provide any services to any natural person or legal entity in St. Lucia.

    EURO EXIM BANK LIMITED (REPRESENTATIVE OFFICE) is incorporated under the laws of England and Wales with company registration number 07520196. This entity is a non-banking financial institution that facilitates international business transactions through issuance and relay of various trade finance instruments. The London-based Representative Office offers Letters of Credit and Standby Letters of Credit to corporate clients only. This office does not provide regulated or controlled services or activities.

    Important Notice: Euro Exim Bank Ltd would like to advise its customers to report any suspicions which they may have regarding the identity of any intermediary who promotes products or services of the Bank or any intermediary bearing similar names. You should verify with Euro Exim Bank by calling the Bank's Customer Service Number on +44 208 207 2868 or emailing [email protected]. Please also be aware of bogus SMS messages and voice message calls or fraudsters who misrepresent services and impersonate the staff of Euro Exim Bank.