How Much Does a Standby Letter of Credit Cost?

How Much Does A Standby Letter Of Credit (SBLC) Cost

How Much Does A Standby Letter Of Credit (SBLC) Cost To Issue And Maintain

SBLC pricing is driven by applicant credit strength, tenor, jurisdiction, currency, and how drawable the text is. Most banks charge an annual commission on face amount, billed quarterly, plus one-off advising, SWIFT, and drafting fees. Collateral can range from 0% to 100% depending on risk profile.

What A Standby Letter Of Credit Is

A Standby Letter of Credit (SBLC) is an independent, irrevocable bank undertaking to pay upon compliant presentation. Most modern SBLCs are governed by ISP98, although some beneficiaries request UCP 600.

Common SBLC Use Cases

  • Commodity supply and offtake contracts
  • EPC and infrastructure projects
  • Advance payment protection
  • Lease and rental obligations
  • Performance and warranty security

Many transactions are structured inside broader trade finance distribution or private credit mandates.

Typical Cost Components

Fee Element Typical Range
Issuance Commission 0.50% – 3.50% p.a.
Confirmation Fee 0.50% – 2.50% p.a.
Fronting Fee 0.10% – 0.30% p.a.
Advising & SWIFT $150 – $400 advising, $75 – $200 per SWIFT
Legal Drafting $500 – $3,000+
Amendments $150 – $350 each

Collateral Expectations

  • Strong corporates: unsecured or covenant based
  • Mid-market companies: 10%–50% cash margin
  • Weaker profiles: up to 100% cash margin or counter-guarantee

If you are offered “no upfront fee SBLC paper”, read why it does not exist.

Underwriting And Issuance Flow

  1. KYC, AML, sanctions screening
  2. Credit and collateral assessment
  3. Draft SBLC text and beneficiary pre-acceptance
  4. RMA and SWIFT routing
  5. Issuance via MT760

Relevant SWIFT Messages

  • MT760 – issuance
  • MT799 – free format confirmation
  • MT199 – status / clarification

How Financely Supports SBLC Issuance

Financely operates as a transaction-led trade and project finance advisory desk. We structure SBLC issuance within broader capital solutions, prepare lender-ready packages, and run controlled distribution to banks and private credit funds.

We focus on transactions above USD 2.5M and deliver binary outcomes: term sheet or written decline.

Documents Required

  • Underlying contract or tender
  • Beneficiary wording or acceptance criteria
  • Corporate documents and ownership chart
  • Latest financials and bank statements
  • Target face amount, tenor, currency

Request An SBLC Quote

Submit your transaction details to receive pricing ranges, collateral options, and a proposed issuance route.

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Disclaimer: For informational purposes only. Not a commitment to lend or issue. All transactions subject to KYC, AML, sanctions screening, credit approval, and definitive documentation.

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.

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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.

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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.

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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.

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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.