Notice. This page is informational and general in nature. Any issuance or funding outcome remains subject to KYC and AML, sanctions screening, legal review, bank credit approval, documentary compliance, and final counterparty acceptance.
Back To Back Letter of Credit Issuance Support
FG Capital Advisors
If your supplier needs an operative Letter of Credit but your deal economics rely on an incoming buyer instrument, we structure and arrange Back To Back Letter of Credit issuance through regulated banking channels.
We also raise gap financing for trade finance transactions when collateral, deposits, or timing gaps block execution.
Submit Your Deal And Request A QuoteWhat A Back To Back Letter Of Credit Does
A Back To Back LC structure uses a received LC as the basis for issuing a second LC in favor of an upstream supplier. This is commonly used when a trader or intermediary must secure supplier performance without tying up full cash collateral for both sides of the chain.
The structure only works when documentary terms, expiry windows, shipment terms, and payment mechanics are synchronized. If they are not synchronized, the intermediary takes timing and mismatch risk that can wipe out margin.
Who This Service Is For
- Commodity traders managing supplier and buyer LCs in the same trade cycle.
- Import and export businesses that need bankable documentary structuring.
- Intermediaries with valid contracts but insufficient balance-sheet room for full collateralization.
- Sponsors needing a structured issuance path that can survive bank scrutiny.
How We Structure The Transaction
1) File Intake And Compliance Screen
We review parties, jurisdictions, goods flow, sanctions exposure, and baseline KYC and AML profile before technical structuring begins.
2) Instrument Viability Test
We assess whether the incoming LC is usable for a Back To Back setup. We check issuer profile, authenticity path, governing rules, reimbursement practicality, and amendment history.
3) Documentary Architecture
We align shipment windows, Incoterms, latest shipment dates, presentation periods, and document sets across both instruments. The objective is clean document flow, not theoretical paper compatibility.
4) Risk Allocation And Security Design
We structure collateral, cash margin logic, assignment mechanics where permitted, and control points for draw risk. We map exposure by stage so counterparties understand who carries what risk and when.
5) Issuance Coordination
We coordinate the issuance pathway with partner institutions, counterparties, and legal advisers to move from approved structure to operative instrument.
6) Execution Monitoring
We track amendments, shipment milestones, document presentations, and settlement-critical dates through execution.
Gap Financing For Trade Finance Transactions
Many otherwise viable trades fail because of a narrow funding gap between what the bank will issue and what the transaction needs at execution. We raise gap financing for trade finance transactions to close that shortfall on a case-by-case basis.
- Cash margin top-up for LC issuance.
- Supplier pre-shipment or performance support.
- Freight, insurance, and logistics bridge tranches.
- Short-tenor working-capital support tied to trade cycle milestones.
Documents We Usually Need
- Corporate KYC pack for all principal entities.
- Draft or issued LC text and MT message details where available.
- Commercial contract set (SPA, offtake, proforma, logistics schedule).
- Commodity specifications, inspection protocol, and delivery route.
- Source and use of funds with a clear transaction timeline.
Clean documentation is not an admin detail. It is often the difference between an executable mandate and a rejected file.
Common Reasons Back To Back LC Deals Fail
- Incoming LC terms that cannot support the outgoing instrument.
- Expiry and shipment mismatch between buyer and supplier obligations.
- Weak compliance file or sanctions-sensitive counterparty exposure.
- Unrealistic pricing assumptions that ignore financing and documentary risk.
- Late-stage legal edits that break bankability.
FAQ
Do you issue the LC directly?
FG Capital Advisors is an advisory and structuring firm. Issuance is executed through regulated banking partners subject to their credit and compliance approvals.
Can you work with first-time traders?
Yes, if documentation, counterparties, and transaction logic are bankable. New entities with weak files usually need additional structuring before issuance is possible.
Do you support commodities only?
Commodities are common, but we also review other trade flows where documentary-credit mechanics are suitable.
How do you handle gap financing?
We raise transaction-specific gap tranches for viable files where timing or collateral shortfalls prevent execution.
Is approval guaranteed?
No. Every case is subject to underwriting, compliance, legal viability, and bank risk appetite.
If you need Back To Back LC issuance support or a gap financing tranche to keep a trade moving, submit your file for review.
Submit Your Deal And Request A QuoteDisclosure. FG Capital Advisors is not a bank and does not provide direct lending. Services are advisory and best-efforts in nature, executed with third-party legal, technical, and capital participants under definitive agreements.
