We provide lender-ready capital raise packaging and debt or equity placement support for business owners and buyers looking to secure serious term sheets and close funding on a defined timeline.
For business owners and acquirers pursuing private debt submit your deal for review. We revert within one working day with next steps and either a quote for our services.
Finance your next trade, project or acquisition.
Debt structuring, targeted lender outreach and negotiation support through closing.
Paid advisory. Upfront retainer applies.
Letters of Credit and Trade Finance
Every LC carries the issuing bank's undertaking to pay against compliant documents. When a second bank confirms the LC, it adds its own separate, definite undertaking to honour or negotiate a complying presentation. The exporter then has two banks it can look to for payment.
Under UCP 600, the confirming bank's undertaking is independent. If documents comply, the confirming bank must pay even if the issuing bank later fails or its country blocks payments. The confirming bank then claims reimbursement from the issuing bank.
A bank can only confirm if it is authorised or requested to by the issuing bank. Where it is not, some banks offer silent confirmation, a separate risk agreement with the exporter outside the LC itself.
For LC basics, see documentary letter of credit and export letter of credit.
| Unconfirmed LC | Confirmed LC | |
|---|---|---|
| Payment undertaking | Issuing bank only | Issuing bank and confirming bank |
| Issuing bank risk | Exporter bears it | Covered by confirming bank |
| Country and transfer risk | Exporter bears it | Covered by confirming bank |
| Cost to exporter | Lower | Confirmation fee added |
| Where documents are checked | Nominated or issuing bank | Usually the confirming bank, locally |
| Speed of payment | Can depend on issuing bank | Confirming bank pays on compliance |
For a deeper comparison, read confirmed vs unconfirmed letters of credit.
Confirmation is worth considering when:
It may be unnecessary when the issuing bank is strong and the country risk is low, in which case the fee may not be justified.
The LC states who pays confirmation charges. Often the exporter pays, but the parties can agree that the buyer pays, and this should be settled in the sales contract.
Main cost drivers:
Additional fees can include advising, examination, payment and discounting charges. See letter of credit fees explained for typical lines. We do not quote standard rates here because pricing is set case by case by each bank.
If the LC was issued without a confirmation request, the exporter can ask about silent confirmation instead. Our letter of credit confirmation services page explains more.
Confirmation fails most often because the chosen bank has no appetite for the issuing bank or country, or because the LC terms are unworkable. Preparation helps:
Financely is a fee-based arranger and advisor, not a bank or lender, and we do not confirm LCs ourselves. We help exporters and traders prepare the request, review the LC wording and approach banks that may confirm. Fees pay for that work, not for an outcome; each bank decides on its own. See trade finance advisory. Intermediaries can also read transferable letter of credit.
An LC where a second bank, usually in the exporter's country, adds its own promise to pay against compliant documents.
Whoever the LC and contract say. Often the exporter, but it can be negotiated.
Cover offered to the exporter by a bank under a separate agreement when the issuing bank has not requested confirmation.
Only if a bank is willing and, for open confirmation, the issuing bank authorises it.
Send us the LC or draft, the issuing bank and the amount, and receive a scoped quote for arranging confirmation.
Request a quote