Purchase or Lease a Standby Letter of Credit

Description

If a client leases any financial instrument that makes the client becomes the temporary holder of that instrument – usually up to one year and one day. Whereas if the client purchases any financial instrument (for example an SBLC) then the client owns that instrument outright with the added benefit of being able to monetize, sell or lease the same instrument to a third party.

Purchasing, leasing, or monetization of SBLCs isn’t quite as straightforward as a simple definition, which is why you do need to hire financial experts that deal with this niche area specifically.

AltFunds Global supports clients who want to purchase or lease a banking instrument.

Qualifications

Our starting point is instruments over $10,000,000.00 or more, participating clients must have a minimum of ten percent (10%) of the face value of the instrument and a signed copy of our CIS/ KYC (Customer Information Sheet / Know Your Client Form).

Benefits

A Standby Letter of Credit (SBLC) is used to enhance a client’s credit facility, allowing the client to access large amounts of credit and thus allowing the client to borrow capital against it. You can purchase the instrument in a discounted price and cash it back a year and a day later.

Process

  1. Participating customers must first schedule a consultation call.
  2. Upon confirmation of the call, the client will receive the initial paperwork.
    •  KYC (Know your client) with a copy of POF (Proof of funds) that they have funds to purchase or lease a funding instrument and cover fees added it.
    •  POF with the funds to cover the face value of the instrument.
  3. Following the consultation call, AltFunds Global will offer the following paperwork:
    •  A signed fee agreement for services rendered.
    •  Mutual non-disclosure, non-circumvent agreement (NDA /NCA).
  4. The client is then provided with a deed of agreement (DOA) that details the issuer, the instrument’s price, broker fees, and closing procedures.
  5. All parties must execute the deed of agreement once it has been signed.

Paperwork

  • KYC (Know your Client Form) or CIS (Customer Information Sheet) with a copy of POF (Proof of funds) that they have funds to purchase or lease a banking instrument.
  • POF with the funds to cover the face value of the instrument.
  • Mutual Non-Disclosure Agreement and Non-Circumvent Agreement (NDA/NCA).
  • Fee agreement for services rendered.
  • Deed of agreement.

Fees

  • The cost of a funding instrument varies from 1%-75% of the face value of the instrument. The price depends on the client wanting to purchase or lease the instrument as well as the credit rating of the issuing bank and the languaging required.
  • Our fees are 2.5% of the face value of the instrument.

Commission to brokers

0.5% of the face value of the instrument.

Timelines

We can often execute a contract in 60 banking days.

Disclaimer

  • The client is fully responsible to cover any legal fees, and tax obligations associated with their transaction.
  • Banking days and timelines may fluctuate based on the market & various banking conditions.

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