Where Startups Can Secure Standby Letters of Credit Without Long Approval Processes
By Taimour Zaman, Founder, AltFunds Global
The Startup SBLC Challenge
Traditional banks often require extensive documentation and lengthy approval processes for standby letters of credit. Startups face additional hurdles due to limited credit history and shorter operating records. In 2024, 59% of businesses applied for financing, and of those businesses, only 52% were fully approved¹ Letters of Credit – Import LC – Financial Instruments Providers
Most major banks require 2-6 weeks for SBLC approval, plus extensive financial documentation spanning multiple years. Startups rarely have this luxury when facing urgent contract requirements or international trade deadlines.
Alternative Lenders Fill the Gap
Alternative lending platforms have recognized this market opportunity. Alternative lenders typically offer streamlined applications and fast funding times. However, for that speed and convenience, alternative lenders often charge higher² Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs… fees than traditional banks.
Several fintech platforms now offer SBLC services with approval timelines as short as 5-7 business days. These platforms utilize automated underwriting systems and prioritize cash flow analysis over traditional credit metrics.
OnDeck has expanded beyond term loans to offer trade finance solutions, including standby letters for qualifying startups. Their digital platform can process applications within days rather than weeks.
Fundbox provides working capital solutions and has partnered with banks to offer expedited SBLC services for established clients with consistent revenue streams.
Community Banks and Credit Unions
Regional institutions often move more quickly than large banks due to their streamlined decision-making processes. Community banks understand local markets and may approve SBLCs based on relationship banking rather than rigid credit formulas.
First Citizens Bank has positioned itself as startup-friendly, offering accelerated SBLC processing for businesses with solid banking relationships. Their regional focus enables faster decision-making compared to national institutions.
Credit unions serving business members can provide competitive SBLC terms with shorter approval timelines. Top business lines of credit for new businesses: SBA CAPLines, OnDeck, Backd, Headway Capital, Fundbox, Wells Fargo, and Bank of America³ Commercial Letters of Credit | First Citizens Bank
Collateralized Solutions for Speed
Cash-secured standby letters offer the fastest approval path for startups. Banks view these as lower-risk transactions, enabling streamlined processing.
Depositing 100-110% of the SBLC amount in a certificate of deposit or money market account can reduce approval time to 3-5 business days at most institutions. While this ties up capital, it provides immediate access to trade finance capabilities.
Fintech-Bank Partnerships
Several fintech platforms partner with FDIC-insured banks to offer digital SBLC services. These arrangements combine fintech speed with bank regulatory compliance.
Brex has developed partnerships that enable fast trade finance solutions for venture-backed startups. Their platform focuses on companies with investor backing rather than traditional credit metrics.
Ramp offers expense management tools and has expanded into trade finance partnerships for qualifying businesses. Most businesses also receive approval for a Ramp Business Credit Card in under 48 hours⁴ Letters of Credit | HSBC
SBA-Backed Options
The Small Business Administration has authorized several fintech lenders to provide government-backed financing solutions. While SBLCs aren’t directly SBA-guaranteed, these relationships can facilitate faster approvals.
SBA-approved lenders often have streamlined processes for established businesses seeking trade finance solutions. The government backing reduces lender risk, potentially shortening approval timelines.
Key Strategies for Fast Approval
Startups can improve approval odds and speed by maintaining strong banking relationships, preparing comprehensive financial packages, and demonstrating consistent revenue streams.
Having 6-12 months of bank statements, recent tax returns, and detailed contract information ready before applying can significantly reduce processing time.
Next Steps
Securing fast SBLC approval requires strategic preparation and selecting the right financial partner. Startups must balance speed requirements with cost considerations and opportunities for relationship building.
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Sources List
- Brex. (2025, September). The 5 Easiest Business Credit Cards to Get in September 2025. Retrieved from https://www.brex.com/spend-trends/corporate-credit-cards/easiest-business-credit-cards-to-get
- NerdWallet. (2025, July 10). Alternative Lending: What It Is, Best Companies. Retrieved from https://www.nerdwallet.com/article/small-business/small-business-loans-alternative-lending
- NerdWallet. (2025, April 8). Best Startup Business Lines of Credit of 2025. Retrieved from https://www.nerdwallet.com/best/small-business/startup-business-line-of-credit
- Ramp. (2025, August 16). Best Business Credit Cards for Startups: Full 2025 Guide. Retrieved from https://ramp.com/blog/getting-a-business-credit-card-for-startups
Disclaimer Footnote
This material is for informational purposes only and does not constitute investment advice, a recommendation to buy or sell securities, or a solicitation. Past performance does not guarantee future results. All investments involve risk, including potential loss of principal. Consult with qualified financial advisors before making investment decisions. This content complies with FINMA regulatory requirements for investment communications.
Compliance Disclaimer
This publication is provided strictly for educational and informational purposes. It does not constitute, and should not be construed as, an offer, solicitation, or recommendation to purchase, sell, or otherwise engage in any transaction involving standby letters of credit (SBLCs), bank guarantees, or any other financial instruments.
AltFunds Global AFG AG is neither a bank, broker-dealer, nor a licensed financial intermediary under Swiss law. All references to financial instruments, providers, or case studies are illustrative in nature and are not to be interpreted as investment advice or a guarantee of performance.
Access to certain financial products, including SBLCs, is restricted to qualified counterparties and accredited investors as defined under applicable laws and regulations. Any individual or entity considering participation must conduct independent due diligence, seek professional legal, tax, and financial advice, and ensure compliance with all relevant regulatory requirements, including those of the Swiss Financial Market Supervisory Authority (FINMA) and equivalent authorities in their jurisdiction.
Past performance, case studies, or survey data referenced in this blog are not indicative of future results. No assurance is given that any transaction or strategy described herein will be suitable or profitable for a particular investor.
By reading this publication, you acknowledge and agree that AltFunds Global AFG AG assumes no liability for losses or damages arising from reliance on the information contained herein.