What Is BG/SBLC/SLOC and How BG SBLC Funding Work
What Is BG/SBLC/SLOC and How Does BG SBLC Funding Work?
Standby Letter of Credit (sblc / sloc) and bank guarantee (bg) are bank financial instrument that is issued by a financial institution such as a bank.
What is Standby Letter of Credit (sblc sloc)?
A standby letter of credit (sblc or sloc) is a legal document that guarantees a bank's commitment of payment to a seller in the event that the buyer–or the bank's client–defaults on the agreement. A standby letter of credit can also be abbreviated SBLC or SLOC.
Advantages of a Standby Letter of Credit (SBLC / SLOC)
The SBLC / SLOC is often seen in contracts involving international trade, which tend to involve a large commitment of money and have added risks.For the business that is presented with a SLOC, the greatest advantage is the potential ease of getting out of that worst-case scenario. If an agreement calls for payment within 30 days of delivery and the payment is not made, the seller can present the SLOC /SBLC to the buyer's bank for payment. Thus, the seller is guaranteed to be paid. Another advantage for the seller is that the SBLC/SLOC reduces the risk of the production order being changed or canceled by the buyer.
An SBLC helps ensure that the buyer will receive the goods or service that's outlined in the document. For example, if a contract calls for the construction of a building and the builder fails to deliver, the client presents the SBLC/SLOC to the bank to be made whole. Another advantage when involved in global trade, a buyer has an increased certainty that the goods will be delivered from the seller.
How to Obtain a Standby Letter of Credit (SBLC / SLOC)
The standby letter of credit process is similar to that of obtaining a bank guarantee (BG), with a few key differences.
Grand City Investment Limited is the worlds number #1 premier provider of bank instruments such as standby letter of credit, bank guarantees, bg sblc. Our SBLC / SLOC approval process is fast and efficient, the instrument can be issued within a week of all paperwork being submitted.
How Much Does SLOC/SBLC Cost?
The SBLC/SLOC fee is 4% of the SBLC/SLOC amount. This fee is usually charged per year that the letter of credit is in effect. If the terms of the contract are fulfilled early, you can cancel the SBLC/SLOC without incurring additional charges. Standby letters of credit can help establish trust with your business partners and be a powerful tool to help meet your business goals.
What is Bank Guarantees (BG)? Bank Guarantee (BG) is an irrevocable commitment by a bank to pay an agreed sum to the beneficiary in the event that the party requesting to the Guarantee fails to perform its obligations or liability to the beneficiary.
The different types of bank guarantee (BG) include Tender Bond Guarantee, Bid Bond Guarantee, Performance Guarantee, Security Deposit, Advance Payment Guarantee.
Benefits of Bank Guarantee (BG)Formal and definite source of undertaking for both applicant and beneficiary as the guarantee is issued by the bank Allows customer to ease their cash flow in replacement for deposit requirement
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