Documentary Letter of Credit – Indicative Term Sheet

Documentary Letter of Credit – Indicative Term Sheet
Parameter Details
Borrower
  • Corporates, trading houses, project SPVs.
  • Audited or Big‑4 reviewed financials.
  • Clean sanctions and AML profile.
Instrument Type
  • Irrevocable Documentary LC (MT700/710).
  • Transferable, governed by UCP 600.
  • Sight, usance, or UPAS structure.
Facility Amount
  • USD 2 million up to 100 million+ (syndicatable).
  • Linked to trade volume, collateral coverage, credit strength.
Tenor
  • 30 – 180 days per shipment.
  • Renewable for rolling trade cycles.
  • UPAS: seller paid at sight, buyer repays 30‑180 days.
Issuing Banks
  • JPMorgan Chase
  • HSBC
  • Standard Chartered
  • China Construction Bank
  • BNP Paribas / Crédit Agricole
Fees & Costs
  • Issuance fee: 0.75 % – 1.50 % p.a. (pro‑rated).
  • Financely arrangement fee: 1 % – 2.5 % of face value.
  • Optional confirmation: +0.25 % – 0.60 % p.a.
  • Amendment / discrepancy: USD 100 – 300 per event.
Up‑front Fees
  • Advisory retainer: USD 15 k – 250 k (creditable to success fee).
  • Legal/SWIFT/compliance pack: USD 3 k – 8 k.
  • Cash or asset margin posted per collateral terms.
Collateral
  • 10 % – 30 % cash margin.
  • Eligible inventory / receivables: up to 70 % advance.
  • Credit‑insured receivables considered case‑by‑case.
Timeline to Issuance
  • Day 1 – Document & KYC upload.
  • Day 4 – 12 – Bank term sheet & approval.
  • Day 12 – 16 – Margin and fee settlement.
  • Day 16 – 25 – SWIFT MT700/710 issuance.
Underwriting Criteria
  • Authentic contracts matching Incoterms.
  • DSCR ≥ 1.2× after funding.
  • Commodity price stress test ±20 %.
  • Clean compliance and ESG profile.
Covenants
  • Trade proceeds flow through pledged account.
  • Quarterly collateral & DSCR reporting.
  • DSCR < 1.1× triggers cash‑trap or facility cut.
  • No change of control without lender consent.
Additional Capital Support
  • Supplementary working‑capital lines and factoring.
  • Pre‑export or bridge‑to‑bank refinancing once shipment history proves out.
Engagement Protocol
  1. Formal Inquiry: Submit Intake Form and pay non‑refundable review fee (credited to retainer).
  2. Proposal & Term Sheet: Financely issues non‑binding term sheet with structure, fees, conditions.
  3. Activation & Retainer: Execute term sheet, wire retainer; formal underwriting and capital matching begin.
  4. Closing & Disbursement: DLC issued; net proceeds (if any) disbursed to client minus agreed fees and participations.
*financely.io – Trade & Project Finance Advisory*

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