How to Get a Standby Letter of Credit from a Genuine Provider Without Getting Scammed
If someone says an SBLC is free, run. If they promise no upfront costs, run faster. Real standbys are issued by banks and rated sureties after KYC, underwriting, and documented collateral. Here is how a clean deal gets done, what you will pay, and the traps that burn time and money.
Outcome:
an issued SBLC under ISP98 or URDG 758, from an acceptable issuer, with clear fees, sensible collateral, and wording that pays on a compliant demand.
First, the Reality Check
No free SBLC
Issuers charge commission per quarter on the outstanding amount. There are setup and messaging fees. Everyone else saying free is selling a story.
No leased SBLC “monetization”
Leased standby pitches and instant cash promises are a sinkhole. Real banks require an underlying obligation and collateral support.
Upfront costs exist
Due diligence, legal review, and underwriting cost money. Expect a modest retainer tied to defined deliverables before banks lift a pen.
Collateral is real
Some banks ask for full cash. Many will accept partial cash plus pledges if the file is tight. Sloppy files mean bigger cash blocks.
What a Genuine SBLC Route Looks Like
1) Intake
KYC, contract, purpose, amount, tenor, beneficiary, and issuer acceptability list collected up front.
2) Structuring
Choose ISP98 or URDG 758. Set amount and expiry. Define collateral mix and any step downs or reductions.
3) Underwriting
Cash flow model, risk memo, covenant set. Bank or surety credit signs off after due diligence.
4) Issuance
Final wording agreed. Collateral posted. Bank sends MT760 to the beneficiary’s bank. Instrument is live.
Fees You Should Expect
| Fee |
Who Pays |
When It Hits |
| Issuance commission |
Applicant |
Quarterly on outstanding amount, billed in advance |
| Confirmation commission |
Usually beneficiary or shared |
Per quarter if confirmation is added |
| Due diligence and underwriting |
Applicant |
Retainer tied to KYC, structuring, risk memo, and bank pack |
| Legal and documentation |
Applicant |
At term sheet and closing for pledges, guarantees, and account control |
| SWIFT and advising |
Applicant unless LC states otherwise |
On issuance and amendments |
| Amendment fees |
Applicant or by agreement |
Each change after issuance |
Due Diligence Checklist That Clears Credit
KYC and legal
Corporate docs, UBO chart, IDs, sanctions screening, good standing, tax certificates if required.
Contract stack
Executed contract or LOA, template SBLC wording, milestones, LDs, issuer acceptability list.
Financials
Audited accounts if available, management P&L, cash flow, debt schedule, 12 to 24 month forecast.
Collateral plan
Cash to be posted, receivables list, revenue pledge source, counter guarantee or surety backstop.
Structuring Moves That Cut the Cash Block
Right size and reduce
Size to real exposure. Add milestone reductions or expiry at handover so exposure falls over time.
Pledges with teeth
Revenue pledge from PPA or offtake, receivables assignment, or blocked collection account with waterfall.
Counter guarantee
Fronting bank issues the SBLC against a counter guarantee from your house bank. Common in cross border files.
Surety backed route
Rated surety supports the risk so a commercial bank can issue with less cash collateral.
What Credit Committees Actually Look For
| Signal |
Good Looks Like |
Bad Looks Like |
| Wording |
Short text under ISP98 or URDG 758, simple demand |
Long lists of documents, vague conditions |
| Amount and tenor |
Sized to real exposure, clear expiry or step downs |
Over sized, open ended expiry |
| Collateral |
Partial cash plus enforceable pledges |
Promises with no legal hooks |
| Applicant behavior |
Fast replies, complete data, clear cap table |
Silence, missing KYC, stories that change |
Red Flags That Scream Scam
- “Leased SBLC” with instant cash or monetization promises
- Provider refuses basic KYC or will not name the issuing bank
- They sell the message type as a product MT760 or MT799 as if that creates money
- They ask you to pay beneficiaries or brokers before any bank confirms issuer details
- They push SKR or warehouse receipts as magic collateral with no legal control
- They promise same day issuance for large amounts with no documents
- They claim no fees and no collateral for a brand name issuer
Provider Verification Checklist
| What to Verify |
How to Verify It |
| Issuer identity and BIC |
Public registry, regulator list, live BIC, phone the bank’s switchboard |
| Recent SBLC issuances |
Redacted copies, bank references, speak to operations on MT760 process |
| Acceptability to beneficiary |
Beneficiary confirms issuer list and any need for confirmation |
| Escrow and fee flow |
Engagement letter that states who holds funds, release triggers, and refunds if banks decline |
Realistic Timeline
| Phase |
Work |
Indicative Time |
| Days 1 to 5 |
Intake, KYC, draft wording, issuer short list |
2 to 5 days |
| Days 6 to 14 |
Structuring, collateral plan, beneficiary acceptability |
5 to 9 days |
| Days 15 to 30 |
Underwriting, legal docs, account pledges |
10 to 15 days |
| Issuance |
Collateral posted, MT760 issued, advice to beneficiary |
Bank dependent |
Wording Essentials That Avoid Draw Drama
- Subject to ISP98 or URDG 758, not vague “bank practices”
- State amount, expiry, place of presentation, and governing law
- Simple draw: signed demand and a short default statement
- Partial drawings allowed if exposure is gradual
- Reduction or cancellation tied to clear milestones
- If confirmation is required, name the confirming bank route
How We Get You a Real SBLC
Bank-ready pack
KYC, risk memo, cash flow model, wording, and collateral plan that a credit officer can approve.
Issuer and confirmer routes
Names that your beneficiary accepts. If needed, confirmation with fee bands and timelines.
Legal and collateral
Pledges, revenue assignments, counter guarantees, and account control agreements drafted and negotiated.
Execution control
We manage redlines, bank messaging, and milestone dates until the MT760 hits and the beneficiary acknowledges.
Deliverables
- Standby wording pack under ISP98 or URDG 758 with draw statement
- Issuer and confirmation route with contacts and fee elements
- Collateral structure and legal checklist with reduction schedule
- KYC and underwriting file banks use to approve the deal
- Timeline mapped to your project or shipment dates
Get a Genuine SBLC Route
Send your contract, requested standby amount and tenor, beneficiary acceptability list, and your collateral options. We will come back with wording, issuer names, fee bands, and a plan that clears underwriting.
Start the Process
This page is informational. Any standby letter of credit or guarantee is subject to issuer due diligence, independent credit approval, KYC and AML checks, and executed documentation. Fees, collateral, and timelines vary by issuer, corridor, and market conditions. We do not support leased SBLC schemes or no-upfront promises. We work only with regulated banks and rated sureties.