Transferable Letter of Credit Structuring for Intermediary Traders
Trading between a supplier and an end buyer? We structure transferable letters of credit so your supplier is paid and your margin is protected.
Start Client IntakeWho This Is For
Intermediary traders who buy from a supplier and sell to an end buyer without funding the purchase themselves. A transferable letter of credit lets you pass all or part of your buyer's credit to your supplier through the transferring bank, while you keep your margin and, where the terms allow, your buyer's identity.
What We Do And What You Receive
We review the buyer's letter of credit, or its draft, and check whether a transferable credit, a back-to-back credit or an assignment of proceeds fits the trade best. We set out the clauses the buyer needs to include, such as the transferable wording and the right to substitute invoices, and work with the transferring bank on the transfer terms. You receive a structure memo, clause wording for your buyer, a document flow showing who presents what and when, and coordination with the transferring bank through to the supplier's presentation and your invoice substitution.
Process And What To Send
Submit the transaction through client intake.
We assess the trade, the buyer's bank and the supply chain.
If it fits, we send a written proposal.
We coordinate the credit wording, the transfer and the presentations.
Send the buyer's letter of credit or draft MT700, the purchase and sale contracts, the issuing and advising banks, the shipment plan and your company documents for KYC.
Why FG Capital Advisors
FG Capital Advisors is an independent structured trade and commodity finance advisor. We are not a bank and do not issue instruments in our own name. We prepare the file, coordinate banks and other counterparties, and work through regulated partners where required. Every request is assessed before we accept a mandate. Where it fits our scope, we issue a written proposal that sets out the scope of work, responsibilities and commercial terms. Final terms are always set by the banks after their own diligence and credit approval.
Related Services and Guides
Start Your Client Intake
Ready to move? Send the transaction through our client intake form, choose the Trade Finance & Working Capital route and include the details listed above. We review every submission and reply in writing with next steps.
Start Client IntakeFrequently Asked Questions
What is a transferable letter of credit?
It is a letter of credit that states it is transferable. Under UCP 600 Article 38, the first beneficiary can ask the transferring bank to make it available, in whole or in part, to a second beneficiary such as the supplier.
Transferable or back-to-back letter of credit?
A transferable credit uses the buyer's credit and needs no new credit line. A back-to-back credit is a second, separate credit issued on the strength of the first, which needs the intermediary's bank to take the risk. We advise on which fits the trade.
Can the supplier and the end buyer see each other?
Not necessarily. With invoice substitution and careful document wording, the intermediary can usually keep the parties apart. This has to be planned before the buyer issues the credit.
