Credit Enhancement Facilities For Trade Finance And Project Finance

Credit Enhancement Facilities For Trade Finance And Project Finance

Credit Enhancement Facilities For Trade Finance And Project Finance

We structure, underwrite, and place credit enhancement that upgrades the risk profile of your transaction so banks and investors can fund at workable terms. Solutions include SBLC, advance payment guarantees, performance guarantees, parent company guarantees, LC confirmation, surety bonds, completion support, political risk insurance, and non payment insurance. All files are screened for KYC, AML, and sanctions.

What Credit Enhancement Achieves

De-risk Counterparties
Replace supplier or sponsor risk with bank or insurer risk so lenders can advance funds and beneficiaries accept obligations.
Lower Pricing
Better risk means tighter spreads, longer tenor, and larger limits. Insurer or confirmer capacity can unlock hold levels across syndicates.
Faster Closes
Pre-agreed wording, clear draw conditions, and a clean documentation pack reduce committee cycles and push deals to issuance.

Credit Enhancement Product Suite

Standby Letter Of Credit (SBLC)
Financial or performance wording under UCP 600 or ISP 98. Issued via SWIFT MT760. Optional confirmation where local enforcement is preferred.
Advance Payment Guarantee (APG)
Secures advance payments on EPC or supply contracts. Drawn if goods or milestones are not delivered on time and to spec.
Performance Guarantee
On demand support for delivery, commissioning, or availability KPIs. Used in construction, energy, and equipment supply.
Parent Company Guarantee (PCG)
Sponsor backs a subsidiary’s obligations. Often paired with APG or performance support to satisfy the owner’s risk committee.
LC Advising And Confirmation
A rated bank adds its undertaking to an LC or SBLC. Shortens cash cycle for exporters and reduces country risk for beneficiaries.
Surety Bonds
Bid, performance, and maintenance bonds provided by rated sureties. Often cheaper on capital than bank guarantees for sponsors with capacity.
Completion And DSRA Support
Completion guarantees and DSRA letters of credit for project finance. Reduces lender reserve requirements at COD and early operations.
Non Payment Insurance
Policy covering commercial and political non payment on receivables and term loans. Assignable to lenders to improve advance rates.
Political Risk Insurance
Cover for expropriation, currency inconvertibility, war, and breach of contract. Used for frontier jurisdictions and long tenor projects.

Trade Finance Use Cases

Distributor Import Programs
Confirmed LC or SBLC to pay suppliers at sight. ABL on inventory and receivables funds the margin and working capital cycle.
Back To Back Supply Chains
Prime buyer receives SBLC, then issues onward SBLC to a sub. Controls prevent circular exposure and set pass-through draw terms.
Receivables Risk Transfer
Non payment insurance on named buyers to lift advance rates in a borrowing base and compress pricing from lenders.
Commodity Offtake
Performance support on shipment schedules and quality specs. APG covers pre-payments against cargo release or warehouse control.

Project Finance Use Cases

EPC Contract Security
Bid, performance, and APG sized to contract value. Draw conditions mirror LDs, defect lists, and acceptance tests.
Completion Support
Sponsor PCG or insurer wrap for mechanical completion and performance tests. Reduces lender hold back and speeds CP satisfaction.
Revenue And Offtaker Cover
Non payment insurance on a PPA or offtake agreement to raise leverage and lengthen tenor on senior debt.
DSRA And Opex Liquidity
DSRA LC and short tenor working capital lines tied to outages or seasonal cash swings after COD.

Capital And Security Expectations

Cash And Securities
20 to 100 percent cash margin or a control agreement over listed securities. Haircuts reflect volatility and tenor.
Asset Based Support
Borrowing base on inventory and receivables to fund margins and fees. Covenants limit dilution and ineligibles.
Sponsor Backing
PCG, equity letters, or escrowed contributions for project draws. Clear step-down once DSCR and covenants are met.

Our Process

1

Screening And Structuring

We test the use case, jurisdiction, and counterparties. We map the right instrument and wording that fits the contract and draw mechanics.

2

Underwriting And Term Sheet

We build the file, price the risk with target issuers or insurers, and secure a term sheet with conditions and timelines.

3

Documentation And Issuance

We finalize wording, indemnities, confirmations, and policy endorsements. Issuer or insurer releases the instrument or binder.

4

Monitoring And Claims Support

We track expiries, auto renewal, and covenants. If a draw or claim is needed we manage notices and evidence on time.

Pricing Bands And Typical Costs

  • SBLC Or Bank Guarantee. 0.5 to 2.0 percent per year based on rating, tenor, and collateral. SWIFT and legal billed at cost.
  • LC Confirmation. 0.3 to 1.2 percent per year based on country risk and issuing bank strength.
  • Surety Bonds. 0.6 to 2.5 percent flat per annum with underwriting on sponsor financials.
  • Non Payment Insurance. 40 to 140 bps per year on covered exposure with named buyers and tenors up to five years in many markets.
  • Political Risk Insurance. 70 to 250 bps per year depending on peril and tenor. Multilateral or private market capacity available.

Documentation We Prepare

Core Pack
  • Specimen wording under UCP 600 or ISP 98 and local law forms
  • Applicant indemnity, reimbursement, and security agreements
  • Board resolutions, incumbency, and KYC file
  • Confirmation instructions or policy endorsements
Risk And Claims
  • Draw and claim checklists with timelines
  • Amendment, cancellation, and renewal procedures
  • Underlying contract extracts and evidence templates
  • Sanctions and adverse media review notes

Frequently Asked Questions

When should I use a guarantee versus non payment insurance?
Use a guarantee or SBLC when the beneficiary wants an on demand bank instrument. Use non payment insurance when a lender needs loss cover to raise advance rates or when buyers are numerous and named on a policy schedule.
Can I fund the margin if cash is tight?
Yes. We arrange asset based lending on receivables and inventory or private credit lines to finance margins and fees where the credit supports it.
What drives pricing the most?
Counterparty rating, country risk, tenor, collateral, and claims history. Clean documentation and clear draw mechanics reduce cost and time.
Do you work with leased instruments?
No. We only place real issuance from regulated banks and rated insurers. Leased or rented claims are not compliant and are often linked to fraud.
How long to close?
Two to eight weeks after a clean file and term sheet acceptance. Confirmation and policy endorsements can add time by jurisdiction.

Request A Credit Enhancement Term Sheet

Share the contract, beneficiary, face value, tenor, and your collateral plan. We will respond with issuer or insurer route, pricing, and the documentation checklist.

Start Your Credit Enhancement Mandate

Financely is an arranger and underwriter. We are not a lender or issuing bank. Services are best efforts and subject to due diligence, regulatory KYC and AML, sanctions screening, and approval by issuers, confirmers, sureties, and insurers. Nothing here is a commitment to lend, issue, confirm, insure, or guarantee.

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.

Express Application Submit Your Deal
Request a Proposal
Request a Proposal / Submit a Deal

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.

Trade Finance

Tap into solutions like letters of credit, bank guarantees, and payment facilitation. We address the challenge of global transaction risk through structured strategies that foster cross-border growth. Complete the form to unlock streamlined funding aligned with your commercial objectives.

Submit a Request

Project Finance

Access non-recourse funding for infrastructure, renewable energy, or other capital-intensive ventures. We mitigate capital constraints by isolating project assets and focusing on risk management. Provide your details to receive a structure that drives growth and maximizes returns.

Submit a Request

Acquisitions

Secure financing for business or real estate acquisitions. We ease transaction hurdles by reviewing cash flow, synergy opportunities, and exit plans. Complete the form for a customized proposal that supports your strategic investment objectives.

Submit a Request

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.

Submit a Request

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.

Still Have Questions? Schedule a Consultation

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.