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
- KYC, AML, sanctions screening
- Credit and collateral assessment
- Draft SBLC text and beneficiary pre-acceptance
- RMA and SWIFT routing
- 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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