Why You Can’t Lease a Letter of Credit (And What It Really Costs)
Many assume they can “lease” a standby letter of credit (SLOC) as easily as renting equipment. In reality, if a bank won’t issue an LC directly, you enter private debt or equity markets—where lenders and investors demand full underwriting, due diligence, and transaction structuring. That process takes weeks or months and incurs genuine costs.
The True Cost of an SLOC
- Underwriting & financial modelling:
Analysis of credit risk and cash flows.
- Offering documents & term sheets:
Drafted by legal counsel.
- Credit assessment or rating:
Required for large issuances to satisfy investor committees.
- Collateral arrangement:
Pledges, trustees, valuations and security structuring.
Each step relies on specialized expertise and external services. Origination fees exist to cover these upfront expenses and ensure only viable mandates proceed.
Our Focused Approach
We receive hundreds of SLOC inquiries each year. Rather than spreading our team too thin, we limit engagements to one or two well-prepared clients who:
- Provide initial feasibility documentation
- Demonstrate sufficient working capital or sponsor backing
- Disclose transparent deal terms
This selectivity allows us and our third-party partners—legal counsel, appraisers, trustees—to concentrate on transactions most likely to secure funding and generate success fees, which represent over 90% of our revenue.
Objective:
Secure a bank-issued Standby Letter of Credit while preserving working capital. Financely arranges:
- Loans backed by receivables or assets
- Equity from institutional investors
- Third-party issuance via vetted sponsors
All SLOCs are issued by regulated banks. Final issuer is selected during structuring—not at enquiry stage.
To proceed:
Complete the screening form. A $500 onboarding fee is payable upon submission. No mandate or retainer is signed until mutual interest is confirmed.
Pricing Summary
| Item |
Range / Description |
| Retainer |
$50,000–$200,000 (post-mandate) |
| Success Fee |
1–3% of face amount |
| Delivery |
SWIFT MT760 or Bank Guarantee |
Timeline:
4–12 weeks from onboarding to issuance.
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Financial Markets Demand Rigor
Financial markets price risk precisely. Any structure requiring capital commitment must justify projected returns. Our process—from analysis through investor presentation—aligns risk and reward, explaining why origination fees are standard practice.
Frequently Asked Questions
Can I lease an LC without paying fees?
No. All legitimate SLOC transactions incur real costs—underwriting, legal opinions, collateral services—covered by origination fees.
How long does the process take?
Typically 4–12 weeks, depending on transaction size, complexity of due diligence, and counter-party approvals.
What does the $500 onboarding fee cover?
It covers initial screening, confidentiality agreement, and the preparation of a preliminary structuring plan.
Are fees refundable if the deal falls through?
No. Retainers cover work already performed—legal opinions, valuations, credit memos—which cannot be unwound.
Why do you limit the number of engagements each year?
To maintain high service quality and focus resources on mandates with the greatest likelihood of success—and where our success fees, our primary profit driver, will materialize.
Disclaimer:
Financely Group is an arranger and advisor only. All mandates are subject to full KYC, AML, and credit approval by third-party banks or chaperones. Fees and timelines are indicative and may vary with transaction complexity and jurisdiction.