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.

We deal with two types of Letters of Credit

At Sight

The payment becomes due shortly, typically within five to ten days, as soon as the seller successfully satisfies the conditions outlined in the letter of credit.

Usance

Referred to as a Deferred Payment LC, Time LC, or Term LC, this type of letter of credit mandates payment on a specified future date, contingent upon the submission of compliant documents.

General Ask

Complete your application in 6 easy steps

Applicant sends us underlying contract (Ex: Sales Contract / pro-forma invoice).
EEB will create a draft instrument and send a quote with our charges (to be paid in advance).
Once the draft has been accepted, we send the indemnity (KYC/AML/due diligence) documents which need to be signed and notarised by a lawyer.
We also send you a formal invoice for our indemnity process and issuance charges.
Once we receive our charges and all DD checks are completed and approved, along with all indemnity documents, we will SWIFT the instrument to the beneficiary’s bank immediately.
Beneficiary is paid at least 14 days before the expiry date (Up to 2 years from SBLC issue date).

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 +44203 011 0133 or emailing info@euroeximbank.com. 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.