Standby letters of credit

Standby letters of credit are very much like documentary letters of credit, their main difference is that, unlike DLCs, they only become operative in case the applicant defaults, then the beneficiary in whose favor the SBLC was issued, can draw on the SBLC and demand payment. A Standby Letter of Credit is a payment guarantee issued by a bank or financial institution that can be used for a wide range of commercial and financial transactions, local or international.

Standby Letters of Credit (SBLC)

Standby Letters of Credit (SBLC) are a financial tool that ensures payment to the seller in case the buyer defaults. Unlike Documentary Letters of Credit (DLC), SBLCs only become operative if the applicant fails to meet their obligations. They serve as a backup payment guarantee and can be used in a wide range of commercial and financial transactions, both local and international.

SBLC Process

As a direct SBLC Provider, we facilitate imports and exports by issuing Standby Letters of Credit – MT760 on behalf of the buyer, in favor of the seller, to finalize trade agreements.

Follow these simple steps to obtain an SBLC from us:

  1. Submit Request – The buyer submits their SBLC request along with the Sales and Purchase Agreement or a proforma offer for the trade deal.

  2. Review and Approval – We will review the trade agreement between buyer and seller and inform the buyer of our approval for the MT760 request.

  3. Service Agreement – If approved, we will sign a service agreement and request payment for admin charges to initiate the SBLC transaction.

  4. Draft and Documents – Once we receive the admin charges, we will draft the SBLC and send it to the buyer for review and approval. The buyer will also need to submit the required documents and pay the issuance fee.

  5. Issuance – After the draft is approved and the fee is paid, we will instruct our bank to issue the SBLC via SWIFT MT760 on behalf of the buyer and in favor of the seller.

What is a Standby Letter of Credit?

A Standby Letter of Credit (SBLC) is a written commitment issued by a bank to guarantee payment to the seller in case the buyer defaults on their contract. Often considered a “payment of last resort,” SBLCs provide assurance that the bank will fulfill the payment obligations if the buyer fails to meet the agreed terms.

SBLCs demonstrate the buyer’s creditworthiness and payment strength, facilitating trade between companies that may have different regulations and rules. They are particularly useful in international trade as they provide the necessary payment guarantee for both parties.

Additionally, an MT760 can be used as collateral for credit enhancement, allowing traders to expand their business without using up cash capital. This improves the company’s cash flow and signals good faith.

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Why Choose a Standby Letter of Credit?

A Standby LC provides added security for both local and international transactions. It guarantees payment to the seller for goods or services once delivered, even if the buyer defaults. For example, if a seller delivers goods and the buyer fails to make payment, the seller can claim the SBLC from the buyer’s bank to receive the payment.

Before issuing the SBLC, the buyer’s bank evaluates the buyer’s creditworthiness. If the buyer’s credit score is low, the bank may require collateral to proceed. However, at

Get Started with SBLC Today

Looking to secure your trade deal with a Standby Letter of Credit? Contact Silver Stone Consultancy SBLC Providers in Dubai, and let us help you navigate the process with ease. We work with top-rated European banks to provide the necessary payment assurance. Submit your requirements today, and we’ll respond promptly.

 SBLC Providers in Dubai, we understand the challenges traders face and offer SBLC MT760 issuance without requiring cash margin.

SBLC Benefits

  • Risk Coverage – As an importer, you can secure the exporter’s payment risk with a single SBLC, valid for up to one year, with the option for renewal 15 days before expiration.

  • Delivery Assurance – The SBLC ensures that goods or services are delivered as per the trade agreement.

  • Payment Guarantee – The seller is guaranteed payment once they comply with the terms of the SBLC. If payment is not received, the SBLC serves as an alternative method to claim the amount due.

  • Access to Loans – Sellers can also use the SBLC as collateral to obtain loans from their bank.

  • Confidence in Transactions – SBLCs provide confidence to both parties involved in the trade, knowing payment is guaranteed.

Parties Involved in an SBLC

  1. Applicant (Buyer) – The party requesting the SBLC from their bank on behalf of the supplier.

  2. Issuing Bank – The bank that issues the SBLC on behalf of the buyer.

  3. Beneficiary (Seller) – The party who receives the SBLC in their favor.

  4. Advising Bank – The bank that advises the seller’s bank about the SBLC.

  5. Seller’s Bank – The seller’s bank, where the final SBLC is received.

SBLC Costs

The buyer typically covers the costs associated with the issuance of the SBLC, including bank commissions, processing fees, and transmission fees. These costs are generally paid by the importer as per the trade agreement. To learn more about our fees, feel free to Contact Us.

SBLC Provider in Dubai

As a leading SBLC provider in Dubai, we offer the option to issue SBLC MT760 from European Banks, providing payment assurance for both importers and exporters. Our experts will tailor the SBLC to your specific needs and help you complete your trade deal within 48 working hours.

To get started, simply submit your requirements to us, and we will get back to you promptly.