Friday, 11 August 2017

Need To Know More About SBLC's?

Standby Letter of Credit Meaning

Stand By Letter of Credit (SBLC), it is a bank instrument quite similar to a bank guarantee "BG"; they both make sure that the beneficiary gets paid. You might see "SLOC" abbreviation, this is just the same thing as an SBLC - it's all in the spelling.

What is an SBLC? 
Although it is not a form of payment, a Standby Letter of Credit acts like a back up payment should payments not be made. If the Buyer doesn't meet payment obligations set in the Deed Of Agreement (DOA), the Provider of the SBLC, is offered protection by the bank. Any business can apply for an SBLC but generally speaking those who need an SBLC tend to be within the Industrial sectors and in Oil and Gas

What Are SBLC’s Used For?

A Standby Letter of Credit is needed and used in the case of non payment of goods received. SBLC’s are normally used in shipment of goods worldwide and it’s one of the best ways to grow a company. Here’s a video with explanation of what an Stand by Letter of Credit is: https://www.youtube.com/watch?v=rK3...

Example Of Leasing an SBLC 

If you want to buy a shipment of 10 Yachts at $20 Million USD each, which event happens first? you buy the for yachts in advance in the hopes the shipment will be delivered OR, the Seller hopes the Buyer will pay for the yacht upon delivery? This creates a catch 22 situation. In order to create some comfort and security within the transaction, the Buyer can initiate an SBLC to cover the cost of purchase in which the Seller can call in the SBLC should the Buyer not pay for the yachts.

Are Standby letter Of Credit Legal?

Yes, Standby Letter of Credit are frequently used in banking and trade finance. They can be both issued and monetised. This is a service very hard to by. Banks are not allowed to advertise such products and they do not belong to a bank. The bank on both Buyer and Seller sides acts as an intermediary by sending messages to confirm and issue the bank instruments. 

Wednesday, 31 May 2017

What can you do with a gemstone portfolio?

There are people who sit on hard assets like gemstone portfolios whose belief is that the value of assets is based on the price they will receive if and when the gemstones are sold. There is a market whereby dealers buy, sell and trade gemstones and other precious assets depending on the supply and demand of trade.

However, there are other ways to generate value within the portfolio without having to sell the gemstones within it. Nowadays there are finance facilities which will offer you a yearly interest rate for ceding your prized asset into their fund. Finance can be structured to secure precious stones in return giving the asset holder a return on investment. The way the structure works is that owners of latent/non performing assets can assign their gemstones/precious metals etc., into these specialized funds. Asset holders still retain ownership and sit back and let the assets yield an annual return. This is a great way to unlock value within the asset.

There are many humanitarian and renewable energy projects worldwide who need funding to help communities thrive and prosper. Gemstones can help securitise a structured funding model for projects come to life. They become collateral. Collateral backs a project and with the finance model in place, banks can structure a loan to fund the projects. Thereby not only are the asset owners unlocking latent value within the asset, they could also be contributing to good causes by assigning their assets into the fund which in turn enables the program to fund projects.

There are other hard assets that could be accepted include; 
  • Government Bonds
  • Precious Metals
  • Rare Earth Metals
  • Base Metals
  • Real Estate / both commercial and residential properties

Sunday, 21 May 2017

Look Out For Potential Scammers

  Here are some important things you need to research before taking on a funder or intermediary service. There are so many individuals out there who state they can do large project funding but are not able to put you in front of a lender or at worse, they disappear. These instances are quite common so we have written this essential guide for you.

Important questions to Ask Yourself

These are some leading questions you might want to find out to help you decide if the intermediary/funder can get your business funded. Not all are scams but if they can't provide you evidence or they don't appear transparent, there might be problems further down the line.

  • Do they have a history of funding project
  • Can they demonstrate project mandates/success
  • Can they give referrals/testimonials
  • How much information do they share about their company on the web? (References from other websites)
  • Do they have a legitimate source(s) of funding 
If you are performing due diligence on a broker they should be able to tell you who they go through when the loan and security agreement is issued. Banks and other alternative financing companies have access to capital lines such as hedge funds, family offices, or direct lines of capital.

Writing a project funding propsal

One thing that might stand out is do these companies understand your business and know what they are saying or are they trying to bluff you? 

**Ask specific questions, they should be able to answer without misguiding you.

Do they stay in contact and answer your questions or do they seem to "dodge the bullet?".

Just be careful with some questions your ask! Some funders won't discuss how they operate, this is because their business might be running on trademark rights so by asking the funder about themselves you might not be doing yourself any favours.

Tell tale signs of a potential scam artist

On many social platform websites like LinkedIn and Google Plus there are many registered users who advertise their services for business funding. There are a couple of things you can do to safeguard your business project proposal from falling into the wrong hands or worst, being sold to by a scam artist. The questions to ask yourself is:

  • Do they appear legitimate? Have a business set up?
  • Are they registered in their home country?
  • Do they have a corporate identity?
  • Do they have a company email address?
  • How transparent and open are they? 
  • Intermediaries do not handle client money.
  • Do they seem to only be interested in money?
  • How much information can someone give you about project finance?
  • How often are you communicating?
STAY AWAY from those who write from generic email account such as Gmail or Yahoo as more often than not, they can not perform.

Usually when dealing with finance professionals (whether it's national or international) the company is formally registered and operated a functional business. It is important to find someone who has experience and certificates in Finance with a good record of deals It also helps to work with registered companies. 

Want to know the secrets of getting funded?

Monday, 15 August 2016

Fees and Costs - Project Finance

Now that you have your business ready for funding, you probably want to know about paying fees and costs for a big project? Many businesses refuse to pay upfront fees and exhaustive list of charges but the biggest question is;

What exactly might you expect to pay?

Thursday, 19 May 2016

Understanding Guarantee Letters

  International Trade Finance | Bank Instruments

It is quite hard to get a bank loan so entrepreneurs are open to other forms of project funding. When entrepreneurs turn to a lending institution, they thought an option would be to attain a letter of guarantee. 

This can work for growing businesses that require BG or SBLC but not for startups. might be involved to enable the funding to go ahead. You can be prepared with a bank guarantee or you might be asked by the funder to get a bank guarantee issued. To reduce confusion let's use the below analogy as an example:

The Provider - Owner of Collateral
The Buyer -Buying to purchase or Lease a Bank Instrument
The Guarantor - The Bank

Collateral - When you use physical goods or property such as a house that you own to obtain a loan, it is known as "collateral". You must pledge one or more of your assets as security for a loan. This can also be secured against company assets. Should you fail to repay the loan, the lender is legally entitled to your physical goods.

Friday, 15 January 2016

Here's what you need to know about; Renewable Energy Funding

Now is the time to get your renewable energy project financed. With countries reaching agreements at the COP21, there is a need for companies to go "green" and implement a business strategy that will eventually enhance the sectors below.