Financial Instruments

Bank Guarantee Letter Of Credit
There are a number of tools used in this day which make doing business much less complicated than it used to be. The abundance in availability of these tools is overwhelming and it can be very difficult to discern which tools are best for a particular situation.Financial Instruments such as Bank guarantees are one such type of instrument.

A bank guarantee. Letter of credit.
A bank guarantee and a letter of credit are similar in many ways but they're two different things. Letters of credit ensure that a transaction proceeds as planned, while bank guarantees reduce the loss if the transaction doesn't go as planned.

A letter of credit is an obligation taken on by a bank to make a payment once certain criteria are met. Once these terms are completed and confirmed, the bank will transfer the funds. This ensures the payment will be made as long as the services are performed.

A bank guarantee, like a line of credit, guarantees a sum of money to a beneficiary. Unlike a line of credit, the sum is only paid if the opposing party does not fulfill the stipulated obligations under the contract. This can be used to essentially insure a buyer or seller from loss or damage due to nonperformance by the other party in a contract.

For example a letter of credit could be used in the delivery of goods or the completion of a service. The seller may request that the buyer obtain a letter of credit before the transaction occurs. The buyer would purchase this letter of credit from a bank and forward it to the seller's bank. This letter would substitute the bank's credit for that of its client, ensuring correct and timely payment.

A bank guarantee might be used when a buyer obtains goods from a seller then runs into cash flow difficulties and can't pay the seller. The bank guarantee would pay an agreed-upon sum to the seller. Similarly, if the supplier was unable to provide the goods, the bank would then pay the purchaser the agreed-upon sum. Essentially, the bank guarantee acts as a safety measure for the opposing party in the transaction. These financial instruments are often used in trade financing when suppliers, or vendors, are purchasing and selling goods to and from overseas customers with whom they don't have established business relationships. The instruments are designed to reduce the risk taken by each party. We believe in providing financial instruments to credible, credit worthy companies with at least 3 years minimum experience in the markets they operate in.

White Capital Group can liaise with its correspondents, to issue Bank Guarantees towards its cients from top 100 financial institutions

Within a 48 -144 hour turn around time.

And to expedite the delivery of the instrument with SWIFT messaging.

Upon full submission of project questionnaire and executive summary. Clients must supply proof of funds showing financial capacity to engage with our Fund Manager. Proof of funds can be a tear sheet, bank statement, or bank reference letter. Once the proof of funds is submitted, please allow us up to 24-72 hours to review and confirm.

Documentary Letter of Credit
What is a Documentary Letter of Credit? A Letter of Credit is a payment term generally used for international sales transactions. It is basically a mechanism, which allows importers/buyers to offer secure terms of payment to exporters/sellers in which a bank (or more than one bank) gets involved.

The technical term for Letter of credit is 'Documentary Credit'. At the very outset one must understand is that Letters of credit deal in documents, not goods. The idea in an international trade transaction is to shift the risk from the actual buyer to a bank. Thus a LC (as it is commonly referred to) is a payment undertaking given by a bank to the seller and is issued on behalf of the applicant i.e. the buyer. The Buyer is the Applicant and the Seller is the Beneficiary. The Bank that issues the LC is referred to as the Issuing Bank which is generally in the country of the Buyer. The Bank that Advises the LC to the Seller is called the Advising Bank which is generally in the country of the Seller.

How can a Letter of Credit help you? For agents, brokers, corporations, government linked companies, small-medium sized enterprises, and traders; Documentary Letters of Credit (Financial Instrument) improves credit worthiness and reduces risk of default, you can gain access to financing options not previously available. White Capital Group can arrange and help you obtain this important financial instrument within a 48 -144 hour turnaround time upon full submission of documents required. Start Application for a Letter of Credit

Standby Letter of Credit
What is a Standby Letter of Credit/Bank Guarantee? Bank Guarantee (BG) is where one Bank (the Issuing Bank A) issues an indemnity(cover/insurance) to another Bank (the Beneficiary Bank B) or directly to a Beneficiary, on behalf of its account holder. The Issuing Bank will expect its account holder to pledge 'assets'/cash to the bank for its issue.

There are effectively two main types of Bank Guarantees,

(1) A Direct Guarantee where the account holder instructs his bank to issue a Guarantee directly in favor of the Beneficiary, and

(2) An Indirect Guarantee where a second bank is requested to issue a Guarantee in return for a counter-Guarantee. In this case the Issuing Bank will indemnify losses made by this second bank in the event of claim against the Guarantee.

A Bank Guarantee is considered a "Demand Guarantee" and as such is governed by the International Chamber of Commerce (ICC) Uniform Rules for Demand Guarantees (URDG).

How can a Bank Guarantee/Standby Letter of Credit help you?

For agents, brokers, corporations, government linked companies, small-medium sized enterprises, and traders can assist in

Acting as a Performance Guarantee (Performance Bond)

Acting as a Payment Guarantee

Acting as a Conditional Payment Guarantee (Conditional Payment Undertaking)

Guaranteeing and securing a Credit Line/Loan

Acting as an Order & Counter Guarantee

White Capital Group can arrange and help you obtain this important financial instrument within a 48 -144 hour turnaround time upon full submission of documents required.