Standby Letters of Credit (SBLCs) are commonly misunderstood, especially when it comes to monetization. Many believe that simply obtaining an MT760 (the SWIFT message for SBLC issuance) means instant access to cash.
The reality is more nuanced—banks do not just hand out loans against an SBLC without proper evaluation. If you’re looking to convert an SBLC into cash, here’s what you need to know.
SBLC monetization (also known as discounting) refers to using a Standby Letter of Credit as collateral to secure a loan or credit facility. This process is not automatic—an SBLC alone is not enough. Lenders will underwrite the deal, assess risk factors, and determine whether to provide financing.
If an SBLC is accepted for monetization, the lender may advance a percentage of its face value, usually at a discount. This is why it’s called SBLC discounting—you never receive the full face value upfront.
The discount rate depends on:
Without supporting contracts or business viability, the SBLC alone won’t be enough to secure financing.
Banks and private lenders don’t simply accept SBLCs at face value—they assess the entire network of contracts surrounding the transaction. This includes:
Without a legitimate business case and financial strength, no lender will extend credit simply because an SBLC exists.
Many brokers and so-called “facilitators” promote SBLC monetization schemes promising instant liquidity. These claims are misleading—lenders require due diligence, risk assessment, and structured financing arrangements. An SBLC without supporting financials and contracts won’t unlock cash.
In cases where a transaction qualifies for funding on its own, banks don’t require an SBLC. Instead, they can accept other forms of collateral or structured guarantees. The reality is that securing an SBLC and then obtaining a loan from a bank is an uncommon funding arrangement—it’s simply too expensive.
This is why legitimate funding rarely involves obtaining an SBLC first and then seeking a loan—the costs outweigh the benefits, making it impractical for most transactions.
If you require a performance or financial SBLC, we can assist. We also have access to lenders who can put up collateral—subject to deal evaluation, of course. No shortcuts, no gimmicks—just real financing solutions backed by legitimate underwriting.
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The SBLC itself isn’t being monetized. What’s actually assessed is the entire deal structure, including contracts, counterparties, and financials. The SBLC serves as collateral, but lenders primarily evaluate the transaction’s viability before providing funding.
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