Back-to-Back & Transferable Letter of Credit Solutions

Back-to-Back & Transferable LC Solutions | Financely

Back-to-Back & Transferable LC Solutions

Unlock supplier terms and keep margin intact by structuring the right LC path. Financely designs and coordinates back-to-back and transferable letters of credit so intermediaries and aggregators can execute larger orders with limited collateral. We select banks, draft wording under UCP 600 or ISP 98, set clear presentation rules, and manage issuance through drawdown. No em dashes are used in this document.

Snapshot: Bank lists and confirmation options. Clean wording and schedules. Back-to-back mirroring with risk buffers. Single or multiple transfers with control of unit prices and dates. E-presentation where accepted. Full document checks and settlement tracking.

What Financely Delivers

  • Instrument selection and ruleset alignment for UCP 600 or ISP 98.
  • Wording that mirrors upstream and downstream obligations without leaking margin or dates.
  • Issuer and confirmer shortlist by jurisdiction, appetite, and fee grid.
  • Transfer conditions, partial shipment logic, and presentation place set in writing.
  • Document templates, pre checks, and courier or e-presentation coordination.
  • Live liaison with bank operations from draft to SWIFT to settlement.

When These Structures Fit Best

Structure Best Use Case Notes
Back-to-Back LC Trader has a master LC from the buyer and needs to issue a supplier LC without extra cash collateral Downstream LC mirrors master LC with buffers for dates and specs
Transferable LC Beneficiary wants to transfer drawing rights to one or more suppliers while keeping price and margin private First beneficiary can substitute invoice and draft and adjust unit prices

The LC Pathway In Four Steps

Step Back-to-Back LC Transferable LC
1. Set Review master LC. Draft supplier LC with earlier shipment and presentation dates and tighter specs Confirm transferability and conditions. Set limits on partial transfers and substitutions
2. Issue Issue downstream LC from the trader’s bank against the master LC as security plus any margin Transfer rights to the second beneficiary. Keep price and quantities aligned to protect margin
3. Present Supplier presents under downstream LC. Trader presents under master LC using substituted documents Second beneficiary presents to the transferring bank. First beneficiary substitutes invoice and draft as needed
4. Settle Proceeds from master LC settle supplier LC. Buffers prevent timing gaps Payment flows through the transferring bank. Differences in price settle to the first beneficiary

Risks And How We Control Them

Risk What Can Go Wrong Control
Date slippage Supplier shipment or presentation later than master LC windows Earlier shipment and presentation dates on supplier LC. Built in buffers and partials
Doc mismatch Specs or descriptions do not mirror, causing refusals Exact mirror of key fields. Pre checks and specimen sets before shipment
Issuer risk Seller will not accept the issuing bank Add confirmation or use a stronger advising bank acceptable to the seller
Margin leakage Transfer reveals price or allows uncontrolled amendments Use substitution rights and limit transferable fields. Lock amendment controls

Bank And Compliance Checklist

  • Clean KYC for all parties and clear trade purpose.
  • Sanctions screening on counterparties, vessels, and ports where relevant.
  • Full set of contracts, POs, or pro forma with Incoterms and specifications.
  • Draft LC text with place of presentation, exam time, and accepted electronic channels.
  • Plan for partial shipments, part draws, and insurance evidence where required.

FAQ

Which ruleset should we use
UCP 600 is standard for LCs. ISP 98 can work well if standby mechanics are needed. We align wording to the chosen ruleset and the bank forms.
Can a transferable LC be transferred more than once
Usually once only. Some banks allow multiple transfers if the original LC permits it. We confirm limits before drafting.
How do we protect price and margin
Use substitution of invoice and draft. Control which fields are transferable. Keep quantities and unit prices within agreed caps.
What if the seller rejects the issuer
Add confirmation from a bank the seller accepts. We negotiate fees and timelines up front.

Build Your LC Path The Right Way

Send the buyer draft, supplier term sheet, and any bank forms. We will return a written plan with wording, banks, confirmation options, and a timeline to issuance.

Submit RFQ

Financely provides LC structuring and coordination through regulated partners. We are not a bank and do not issue letters of credit. All transactions are subject to KYC, AML, sanctions screening, and bank approvals. Rulesets applied include UCP 600 and ISP 98 as agreed by the parties. Nothing on this page is an offer or a commitment to finance.

Get Started With Us

Submit Your Deal & Receive a Proposal Within 1-3 Working Days

Submit your deal using our secure intake form, and receive a quote within 1-3 business days. Existing clients can connect with their relationship manager through our secure web portal.


All submissions are promptly reviewed, and all communications are conducted through the intake form or the client portal for a seamless and secure process.

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Thank you for considering working with us. A nominal fee of US$500 is required upon completion of each form. This fee covers the time and effort we invest in reviewing your submission and crafting a thorough proposal. We receive numerous inquiries and prioritize those that carry this fee, ensuring serious applicants receive prompt attention.

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For Banks

Financely assists banks facing Basel III pressures by distributing trade finance deals and providing collateral for letters of credit. We reduce capital burdens while preserving client relationships and fostering service expansion. Submit your request to optimize your trade finance offerings.

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Once we receive your submission, our team will review your information to determine feasibility. If eligible, you will receive a proposal or term sheet within 1–3 business days. Visit our FAQ and Procedure pages for more information.

Disclaimer: Financely provides financing based on due diligence and feasibility. Approval is not guaranteed, and past performance does not predict future outcomes. All terms are subject to review. Financely primarily assists with structuring and distribution. Qualified parties carry out the project if the client approves the proposal.

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If you still have questions after visiting our FAQ and Procedure pages, we invite you to book a paid consultation for personalized guidance. A $250 USD fee applies per session.