BG’s (and SBLC’s) can be used to enhance your ability to apply for a line of credit with your bank; in other words, it can be used as collateral when your bank is asking for additional comfort when you ask them to fund your project.

We can help you acquire a BG.

The BG’s we deal in are genuinely 100% cash-backed and therefore usable as collateral. Our issuers only use top 25 World Banks – mainly from Europe like HSBC, Deutsche, UBS etc. This guarantees world wide acceptance of your BG.

These BG’s are generated by “someone” blocking their funds on your behalf, so we speak of a “leased” BG. In other words the BG is owned by the issuer and you are the beneficiary.

The BG is generally issued for 1year and 1 day, but can easily be extended up to 5 years. (It is possible to get a BG for only 6 months). Once issued the BG is transferred to your bank via the Swift protocol of MT760.

Of course, Leasing of a BG comes at a cost. And to be very honest: at a high cost. Financing your project by using a BG is very expensive. First you need to pay money to the issuer of the BG plus commission to the consultants facilitating the process, Then you need to give the BG to your bank, who are providing a Line of Credit against the BG, which may only be up to 90% LTV or less. And usually, your bank will charge a one off fee to ‘monetise’ the instrument and also charge interest on the drawn down loan amount.

To successfully apply for a BG you need to be aware of four vital points:
a) You need to have a good project
b) You need to have a bank funding your project based on the supporting collateral of an issued BG
c) You need to have the money to pay for the leasing of the BG
d) You need to have a believable and realistic exit strategy to repay the loan and return the BG at the end of the term.

All the BG’s we deal with are callable, assignable, fully transferable and lienable.

If you are thinking of using a BG to participate in a High Yield Trade Program, we are more than happy to assist you in acquiring the BG and placing it into trade.

However, you need to be very sure you are able to pay the leasing fees of the BG before issue, as most providers will not allow the instrument to be taken into a Trade Program unless and until the fee is paid. You cannot pay the lease fee from the program returns .

It is also not possible to use a BG to secure a commodity trade and pay for the BG out of the profits from the transaction.