BG / SBLC – recourse
Firstly in order to progress a facility, we will need to receive a completed Client information Profile (Form attached) This can be completed and relevant evidence to be attached and sent to us by email, hard copy to be send to our office with list of documents.
1: Once we receive your information it will be immediately acknowledged. As we are required by law to undertake due diligence and identification verification, our compliance department will carry forward your application to offer our financiers the initial acceptance of the application.
2: After initial approval, our financiers will seek a suitable provider willing to offer the facility to the applicant (subject to contract) and obtain their best indicative terms, indicate terms are an outline of what may be achieved and provide the applicant with basic illustration and an offering in principal including pricing and the maximum amount of the Bank Guarantee or SBLC available to the applicant.
3: If these indicative terms are acceptable, we then begin to acquire the formal and detailed terms, which are then presented in the Terms sheet contract to the applicant. The term sheet is a formal details all elements of the Bank Guarantee / SBLC including the amount, term, the provider, the issuing bank, the recipient bank pricing, costs, terms and procedures and of course a draft wording of the Instrument itself. The Term sheet is binding offer to provide the facility.
4: If the terms provided are acceptable, the applicant formally accepts the Terms by signing and returning the Term sheet within the period of validity (usually 7 days) the applicant is under no obligation to accept the formal Term sheet. Upton accepting the terms, the Booking fees should be paid to our provider facilitator. Once executed the term sheet is abiding agreement between both the parties.
5: Once the Term sheet is received, FCI or its partner provider start the process of allocation of the collateral with the Provider and the Provider then issues their formal collateral offer to the applicant who now becomes the Beneficiary binding each of the parties to the issue and receipt of the Bank Guarantee / SBLC. Typically, the provider will request the applicant to meet with them at their offices to present the formal collateral offer if a meeting is not possible for the applicant; our financier can attend and represent the applicant offer documents. Of course our financiers are on hand to accompany our clients at each and every stage of process if the wish to use our service.
6: The Collateral offer is a formal contract binding the parties (the Provider and the Beneficiary) to issue and receive the Guarantee / SBLC and enter into Collateral transfer agreement. This is generally expected to be executed by both parties with in a period of 10- 14 days of its presentation.
7: If necessary and if requested by the Provider, the Beneficiary will be required at this stage to make the refundable security deposit payable directly to the Provider or to a suitable escrow arrangement established for the transaction, as will be noted within the Collateral offer document.
8: Once any required deposit has been lodged, the Provider will instruct the issuing Bank to make contract with the Beneficial Bank and will issue the executed Collateral transfer agreement (CTA) The CTA governs the transaction throughout the terms of instrument. Typically at this stage the issuing Bank will issue a swift advice to the recipient bank (The bank receiving the BG/SBLC) confirming and verifying the pending transaction.
9: The Beneficiary will be expected to instruct his receiving bank to respond to the Swift advice offering their agreement to receive the instrument and to provide any other account verifications required, prior to the issue of the BG/SBLC (MT760) to the Beneficiaries account.
10: At this juncture the Beneficiary will need to show proof that they have the ability to settle any outstanding Contract Fees and our completion fee due. If FCI or its financial provider are assisting the Beneficiary with the Credit facilities the Lender can step in to show the provider such proof and can settle the balance of the credit facilities, and the completion fees direct from the loan. However, if the Beneficiary is not using our service to raise credit facilities, they will need to demonstrate their ability to pay.
11: At the end of the contract term, the Beneficiary will be expected to clear any encumbrances over the Guarantee/SBLC 5 days prior to its expiry