Professional Services. Standby Letter of Credit advisory and arrangement. Prepared September 2025.
Standby Letter of Credit Advisory
Need a standby that works at draw, not just on paper. We draft clean ISP98 wording, align beneficiary demand mechanics, price issuance and confirmation, plan the margin, and place the file with banks that actually issue and confirm. Goal is simple. Get the instrument out, cut dispute risk, protect cash.
Who it suits
Exporters, commodity traders, EPC primes, suppliers needing credit support.
Typical size
USD 2m to 100m per standby. Larger on syndication.
Rule set
ISP98 preferred. UCP 600 on request where market practice allows.
What We Deliver
Text drafting and review
Beneficiary statement wording, presentation place, expiry, extension, governing law, and cure mechanics that actually work.
Pricing and bank selection
Issuance and confirmation quotes from banks with appetite for your country and sector.
Margin plan
Cash, securities pledge, or offtaker support. Step downs tied to milestones where possible.
Document pack
Applicant KYC, transaction file, collateral evidence, and compliance checklist ready for credit.
Standby Types We Arrange
Performance
Supports delivery or project milestones with clear draw tests and step downs.
Advance payment
Protects a deposit with release on shipment or completion evidence.
Payment
Backstops an invoice with defined trigger events and short cure periods.
Warranty and retention
Covers defects period with capped exposure and clear expiry.
Counter standby
Issued to back a local standby in another jurisdiction.
Bid bond
Tender support with rapid issuance and automatic expiry.
Pricing And Core Terms
| Item | Typical Range | What moves it |
|---|---|---|
| Issuance fee | 1.0% to 3.0% per annum on face | Applicant credit, tenor, country and sector risk |
| Confirmation fee | 0.25% to 2.0% per annum | Issuing bank rating, currency, jurisdiction |
| Cash margin | 0% to 50% of face | Credit strength, collateral, structure, rule set |
| Flat charges | Advising and MT760 or MT767 messaging | Bank tariff and network fees |
| Lead time | 5 to 15 business days | Limits in place, clean text, complete KYC |
Ranges are indicative. Final terms are set by issuing and confirming banks after diligence.
How We Get Your Standby Issued
- Scope and draft. Confirm standby type, beneficiary, amount, tenor. Draft ISP98 text with achievable presentation.
- Bank shortlist and pricing. Approach banks with appetite for the risk. Capture issuance and confirmation quotes.
- Margin plan. Set collateral, step downs, assignments, and escrow where needed.
- Credit and documents. Applicant pack, transaction file, sanctions checks, and any legal opinions the bank requests.
- Issuance. Final text, approvals, and messaging. Standby is advised to the beneficiary.
- Aftercare. Amendments, extensions, monitoring of milestones, and margin releases.
Documents Banks Expect
Applicant
Corporate KYC, ownership chart, audited financials, recent management accounts, bank statements.
Transaction
Underlying contract, beneficiary details, performance or payment milestones, draft standby text.
Collateral
Cash or securities evidence, offtaker LC or prepayment terms if assigned, insurance where relevant.
Compliance
Sanctions and AML checks on counterparties, permits where required, requested legal opinions.
Key Risks And Controls
- Ambiguous demand wording. We set clear beneficiary statements and cure periods to cut disputes.
- Country and bank risk. Use confirmation or change advising banks when exposure is high.
- Evergreen confusion. Define auto renewal and notice periods in plain terms.
- Margin drag. Negotiate step downs tied to delivery or project completion.
Frequently Asked Questions
Is an SBLC the same as a bank guarantee
Similar purpose. SBLCs commonly reference ISP98 or UCP 600. Demand guarantees often reference URDG 758. We match the beneficiary policy.
Can a bank send MT760 before collateral is posted
No. Messaging follows credit approval and executed documents with required security in place.
How much cash margin is typical
Anywhere from zero to fifty percent. Strong credit and clean structure reduce the ask. Step downs can free cash as milestones are met.
Can an SBLC be monetized for cash
Banks do not pay cash for leased standbys. We arrange legitimate margin loans or bridges where collateral and structure justify it.
Get An SBLC Term Sheet And Wording
Send your draft text and contract details. We will return pricing, a margin plan, and a bank path to issuance.
Start NowDisclaimer. FG Capital Advisors provides advisory and arrangement services. Terms are set by issuing and confirming banks. No leased instruments. Final pricing and collateral terms depend on credit, structure, and jurisdiction.
