Innovative
Investments
FOR THE FUTURE
Elevate your business with Silicon Valley Global Inc.'s management consulting services.
10,000+
CLIENTS
SERVED
50+
BANK
PARTNERS
$5B+
ISSUED
LC/SLBCS
100+
CONSULTANTS
WORLDWIDE
Innovative
Bank Instruments
Services
- Letters of Credit
- Risk reduction: LCs help reduce the risk for both the buyer and the seller in international trade transactions. The seller is guaranteed payment once the conditions of the LC have been met, while the buyer is assured that the goods or services they are paying for will be delivered as agreed.
- Assurance of quality: LCs provide assurance to buyers that the goods or services they are paying for will meet the required quality standards, as specified in the LC.
- Access to financing: LCs can help facilitate access to financing for buyers and sellers by providing a guarantee of payment or creditworthiness.
- Issuance: An LC is issued by a bank on behalf of the buyer, providing a guarantee of payment to the seller.
- Conditions: An LC includes specific conditions that must be met by the seller, such as providing the required documents, before payment can be made.
- Types: There are different types of LCs, such as revocable or irrevocable, confirmed or unconfirmed, standby or documentary, depending on the requirements of the buyer and seller.
- Parties involved: An LC involves several parties, including the buyer (importer), seller (exporter), issuing bank, advising bank, and confirming bank.
- Agreement: The buyer and seller agree to use an LC as the method of payment for the transaction.
- Application: The buyer applies for an LC from their bank, providing the necessary details of the transaction, such as the amount, goods or services being traded, and any specific conditions.
- Issuance: The issuing bank issues the LC to the seller, either directly or through an advising bank, specifying the terms and conditions of the LC.
- Fulfillment: The seller fulfills the conditions of the LC, such as providing the required documents or delivering the goods or services as specified.
- Payment: The issuing bank pays the seller, either directly or through a confirming bank, once the conditions of the LC have been fulfilled.
- UPAS LC
- For Importers: Purchase goods with deferred payment at appropriate cost of capital (equivalent to interest rate of loans in USD). Appropriate to customers importing using L/C method.
- For Exporters: Immediately get paid without any extra cost
- UPAS (Usance LC payable at sight) is a deferred payment method of documentary credit but foreign exporters can immediately get paid via advance from foreign agent banks.
- L/C currencies: All currencies agreed by Sacombank and Agent banks.
- Deferral period: Maximum 6 months (depending on Agent bank supplying UPAS service)
- Deposit: Under regulations of Sacombank at certain time
- Transaction fees: Under agreements at the time of issuance. Conditions and Documents
- Subjects of application: Export enterprises using L/C method holding current account at Sacombank
- Customers send application form of import L/C opening with related documents (Foreign trade contract, request form for foreign currency purchase).
- Standby Letters of Credit
- Risk mitigation: SBLCs provide a form of risk mitigation for both buyers and sellers, as they guarantee payment in case of default or non-performance by either party.
- Flexibility: SBLCs can be tailored to meet the specific needs of each transaction, with terms and conditions negotiated by the parties involved.
- Financing: SBLCs can be used as collateral to secure financing from banks or other financial institutions, providing additional liquidity and cash flow management options.
- Irrevocable: SBLCs are usually irrevocable, meaning they cannot be cancelled or modified without the consent of both parties involved.
- International recognition: SBLCs are widely recognized and accepted in international trade transactions, and are often used as a preferred method of payment in cross-border deals.
- Customizable: The terms and conditions of an SBLC can be customized to suit the specific needs of each transaction, with details such as the amount, expiry date, and required documents all being negotiable.
- Transferable: SBLCs can be transferred to third parties, allowing for greater flexibility and the ability to buy or sell the underlying goods or services.
- Conditional payment: Payment under an SBLC is conditional upon the fulfillment of certain terms and conditions, providing a level of protection for both parties involved.
- Non-cash collateral: SBLCs can be used as non-cash collateral for obtaining financing or credit from banks or other financial institutions, without the need for physical collateral.
- Issuance: The buyer's bank issues an SBLC in favor of the seller, guaranteeing payment in case of default. The SBLC specifies the terms and conditions under which payment will be made, as well as any documentation required to trigger payment.
- Presentation: The seller presents the required documents to the buyer's bank to trigger payment under the SBLC. These documents typically include proof of shipment or delivery of goods, as well as any other documents specified in the SBLC.
- Verification: The buyer's bank verifies that the documents presented by the seller meet the requirements of the SBLC, and if so, releases payment to the seller.
- Bank Guarantees
- Risk Mitigation: Bank Guarantees provide a level of protection against non-performance, default or breach of contract by the client.
- Increased Credibility: Having a Bank Guarantee in place can improve the credibility and reputation of the client, providing assurance to the beneficiary that payment will be made.
- Access to Financing: Bank Guarantees can be used as collateral for obtaining financing or credit from banks or other financial institutions.
- Irrevocable: Bank Guarantees are usually irrevocable, meaning that they cannot be cancelled or modified without the consent of all parties involved.
- Conditional Payment: Payment under a Bank Guarantee is conditional upon the fulfillment of certain terms and conditions, such as the non-performance or breach of contract by the client.
- Customizable: Bank Guarantees can be tailored to meet the specific needs of each transaction, with details such as the amount, duration, and required documentation all being negotiable.
- Transferable: Bank Guarantees can be transferred to third parties, allowing for greater flexibility and the ability to buy or sell the underlying goods or services.
- Non-Cash Collateral: Bank Guarantees can be used as non-cash collateral for obtaining financing or credit from banks or other financial institutions, without the need for physical collateral.
- Application: The client (principal) applies for a Bank Guarantee from their bank, specifying the amount, duration, and terms of the guarantee.
- Issuance: The bank issues the Bank Guarantee in favor of the beneficiary, outlining the terms and conditions under which payment will be made.
- Presentation: The beneficiary presents the required documents to the bank to trigger payment under the Bank Guarantee, such as proof of non-performance or breach of contract by the client.
- Verification: The bank verifies that the documents presented by the beneficiary meet the requirements of the Bank Guarantee, and if so, releases payment to the beneficiary.
- Performance Guarantees
- Risk Mitigation: Performance Guarantees provide a level of protection against non-performance, default or breach of contract by the client.
- Increased Credibility: Having a Performance Guarantee in place can improve the credibility and reputation of the client, providing assurance to the beneficiary that the project or contract will be completed in accordance with the agreed upon terms and conditions.
- Access to Financing: Performance Guarantees can be used as collateral for obtaining financing or credit from banks or other financial institutions.
- Irrevocable: Performance Guarantees are usually irrevocable, meaning that they cannot be cancelled or modified without the consent of all parties involved.
- Conditional Payment: Payment under a Performance Guarantee is conditional upon the completion of the project or contract by the client in accordance with the agreed upon terms and conditions.
- Customizable: Performance Guarantees can be tailored to meet the specific needs of each transaction, with details such as the amount, duration, and required documentation all being negotiable.
- Transferable: Performance Guarantees can be transferred to third parties, allowing for greater flexibility and the ability to buy or sell the underlying goods or services.
- Non-Cash Collateral: Performance Guarantees can be used as non-cash collateral for obtaining financing or credit from banks or other financial institutions, without the need for physical collateral.
- Application: The client (principal) applies for a Performance Guarantee from their bank or other financial institution, specifying the amount, duration, and terms of the guarantee.
- Issuance: The bank or other financial institution issues the Performance Guarantee in favor of the beneficiary, outlining the terms and conditions under which payment will be made.
- Completion: The client completes the project or contract in accordance with the agreed upon terms and conditions.
- Presentation: The beneficiary presents the required documents to the bank or other financial institution to trigger payment under the Performance Guarantee, such as proof of completion of the project or contract in accordance with the agreed upon terms and conditions.
- Verification: The bank or other financial institution verifies that the documents presented by the beneficiary meet the requirements of the Performance Guarantee, and if so, releases payment to the beneficiary.
- Demand Guarantees
- Risk Mitigation: Demand Guarantees provide a level of protection against non-performance, default or breach of contract by the client.
- Increased Credibility: Having a Demand Guarantee in place can improve the credibility and reputation of the client, providing assurance to the beneficiary that payment will be made in the event of non-performance or default.
- Access to Financing: Demand Guarantees can be used as collateral for obtaining financing or credit from banks or other financial institutions.
- Irrevocable: Demand Guarantees are usually irrevocable, meaning that they cannot be cancelled or modified without the consent of all parties involved.
- Payment on Demand: Payment under a Demand Guarantee is made on demand by the beneficiary if the client fails to fulfill their obligations.
- Customizable: Demand Guarantees can be tailored to meet the specific needs of each transaction, with details such as the amount, duration, and required documentation all being negotiable.
- Transferable: Demand Guarantees can be transferred to third parties, allowing for greater flexibility and the ability to buy or sell the underlying goods or services.
- Non-Cash Collateral: Demand Guarantees can be used as non-cash collateral for obtaining financing or credit from banks or other financial institutions, without the need for physical collateral.
- Application: The client (principal) applies for a Demand Guarantee from their bank or other financial institution, specifying the amount, duration, and terms of the guarantee.
- Issuance: The bank or other financial institution issues the Demand Guarantee in favor of the beneficiary, outlining the terms and conditions under which payment will be made on demand.
- Non-performance: In the event of non-performance or default by the client, the beneficiary can make a demand for payment under the Demand Guarantee.
- Presentation: The beneficiary presents the required documents to the bank or other financial institution to trigger payment under the Demand Guarantee, such as proof of non-performance or default by the client.
- Verification: The bank or other financial institution verifies that the documents presented by the beneficiary meet the requirements of the Demand Guarantee, and if so, releases payment to the beneficiary.
- Bid / Tender Bonds
- Demonstrates commitment: A Bid/Tender Bond shows the client that the bidder is serious about the project or contract and is committed to seeing it through if awarded the bid.
- Assurance to client: The Bid/Tender Bond provides assurance to the client that if the bidder is awarded the bid, they will enter into a contract and perform the work as specified.
- Helps with prequalification: Bidders with Bid/Tender Bonds are often preferred by clients because they have already undergone a prequalification process with a financial institution.
- Conditional: Bid/Tender Bonds are typically conditional, meaning that they are only valid if the bidder is awarded the bid and enters into a contract with the client.
- Specific amount: Bid/Tender Bonds are issued for a specific amount, usually a percentage of the bid amount, and are typically valid for a fixed period of time.
- Non-refundable: Bid/Tender Bonds are usually non-refundable, even if the bidder is not awarded the bid.
- Customizable: Bid/Tender Bonds can be customized to meet the specific needs of each bid, with details such as the amount, duration, and required documentation all being negotiable.
- Application: The bidder applies for a Bid/Tender Bond from their bank or other financial institution, specifying the amount, duration, and terms of the bond.
- Issuance: The bank or other financial institution issues the Bid/Tender Bond in favor of the client, outlining the terms and conditions under which it will be valid.
- Bid submission: The bidder submits their bid or tender to the client, along with the Bid/Tender Bond.
- Award decision: The client reviews the bids and makes a decision on which bidder to award the contract to.
- Contract execution: If the bidder is awarded the contract, they must enter into a contract with the client and provide any additional documentation or security as required by the contract.
- Release of Bid/Tender Bond: Once the contract is executed, the Bid/Tender Bond is usually released by the bank or other financial institution.
- Ready, Willing, Able (RWA)
- Increased confidence: RWA provides increased confidence to the seller or exporter that the buyer has the financial resources to fulfill their obligations under the transaction.
- Mitigates risk: RWA helps to mitigate the risk of non-payment by the buyer, reducing the risk for the seller or exporter.
- Enables financing: RWA can be used as a basis for financing, as financial institutions may be more willing to provide credit if they are assured of the buyer's ability to pay.
- Three criteria: RWA involves three criteria that must be met by the buyer: readiness, willingness, and ability to pay for goods or services.
- Readiness: Readiness refers to the buyer's preparedness to complete the transaction, including any necessary documentation and logistics.
- Willingness: Willingness refers to the buyer's willingness to pay for the goods or services, and their intent to fulfill their obligations under the transaction.
- Ability: Ability refers to the buyer's financial capacity to pay for the goods or services, including their creditworthiness and access to financial resources.
- Due diligence: The seller or exporter conducts due diligence on the buyer to determine their financial capacity and creditworthiness.
- RWA confirmation: The buyer provides confirmation of their readiness, willingness, and ability to pay for the goods or services, usually through a bank confirmation or other financial instrument.
- Transaction execution: If the seller is satisfied with the RWA confirmation, the transaction can be executed, with payment typically made through a letter of credit or other financial instrument.
- Payment and delivery: The seller delivers the goods or services, and payment is made according to the terms of the transaction.
- Bank Comfort Letter (BCL)
- Provides assurance: A BCL provides assurance to the recipient that the issuer has the financial capability to fulfill its obligations.
- Mitigates risk: BCLs are often used in international trade to mitigate the risk of non-payment by the buyer.
- Enhances credibility: BCLs can enhance the credibility of the issuer, as they demonstrate a willingness to back up their financial commitments.
- Issued by a bank: BCLs are issued by a bank on behalf of its client, providing assurance of the client's financial capability.
- Non-binding: BCLs are typically non-binding, meaning that they do not create a legal obligation for the issuer to provide funding or otherwise support the client's obligations.
- Conditional: BCLs are often conditional, meaning that they are only valid if certain conditions are met, such as the completion of a transaction.
- Request: The recipient of the BCL typically requests the document from the issuer, either as a condition of a transaction or as a general assurance of the issuer's financial capability.
- Issuance: The issuer issues the BCL on behalf of its client, providing assurance of the client's financial capability.
- Delivery: The BCL is typically delivered directly to the recipient, although it may be delivered through an intermediary if required.
- Verification: The recipient may verify the BCL with the issuing bank to ensure that it is authentic and that the issuer has the financial capability to fulfill its obligations.
- Pof/ Blocked Funds
- Provides assurance: POF/Blocked Funds provides assurance to the recipient that the issuer has the financial capability to fulfill its obligations.
- Mitigates risk: POF/Blocked Funds are often used in international trade to mitigate the risk of non-payment by the buyer.
- Enhances credibility: POF/Blocked Funds can enhance the credibility of the issuer, as they demonstrate a willingness to back up their financial commitments.
- Issued by a bank: POF/Blocked Funds are issued by a bank on behalf of its client, providing assurance of the client's financial capability.
- Non-negotiable: POF/Blocked Funds are non-negotiable and non-transferable, meaning that they cannot be sold or transferred to another party.
- Conditional: POF/Blocked Funds are often conditional, meaning that they are only valid if certain conditions are met, such as the completion of a transaction.
- Request: The recipient of the POF/Blocked Funds typically requests the document from the issuer, either as a condition of a transaction or as a general assurance of the issuer's financial capability.
- Issuance: The issuer issues the POF/Blocked Funds on behalf of its client, providing assurance of the client's financial capability.
- Delivery: The POF/Blocked Funds are typically delivered directly to the recipient, although it may be delivered through an intermediary if required.
- Verification: The recipient may verify the POF/Blocked Funds with the issuing bank to ensure that it is authentic and that the issuer has the financial capability to fulfill its obligations.
- Loans & Project Funding
- Access to capital: Loans and Project Funding provide access to capital that individuals or companies may not have otherwise been able to obtain.
- Flexible repayment terms: Loans and Project Funding often offer flexible repayment terms, allowing borrowers to repay the loan in a way that fits their financial situation.
- Competitive interest rates: Loans and Project Funding may offer competitive interest rates compared to other forms of financing.
- Collateral: Loans and Project Funding may require collateral, such as property or equipment, to secure the loan.
- Repayment terms: Loans and Project Funding may offer different repayment terms, such as fixed or variable interest rates, and varying loan terms, such as short-term or long-term loans.
- Application process: Loans and Project Funding typically require an application process, which includes a review of the borrower's credit history, financial statements, and other relevant documents.
- Application: The borrower applies for a loan or project funding by submitting an application to the lender or funder, providing detailed information about the proposed project or purpose of the loan, as well as their financial situation.
- Review: The lender or funder reviews the application, which may include a review of the borrower's credit history, financial statements, and other relevant documents.
- Approval: If the lender or funder approves the application, they will typically provide the borrower with a loan or project funding offer, which will include the terms of the loan or funding, such as interest rates, repayment terms, and any collateral requirements.
- Disbursement: Once the borrower accepts the loan or project funding offer, the lender or funder will disburse the funds to the borrower, either in a lump sum or in installments.
- Repayment: The borrower is responsible for repaying the loan or project funding according to the terms of the loan agreement or funding contract.
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