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1 "correct" answer available (5 pts) 3 "helpful" answers available (4 pts)

7 Replies Last post: Aug 22, 2009 7:17 AM by LUCKIEST

Stand-By Letter of Credit from Merchant Bank

Jun 16, 2009 4:21 PM

PaperToucher 7 posts since
Aug 11, 2008

Hello To All,

I have a business deal that was getting ready to be completed by a Merchant Bank. Unfortunately due to lack of funds on their part
they have decided to give me a Stand By Letter of Credit. I know a little something about that, but not enough. When I receive this letter
of Credit is it possible to go to my local bank and get the funds I need there, after my local bank goes through proper procedures?

Thank You

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funds2924 36 posts since
Jan 14, 2009

1. Re: Stand-By Letter of Credit from Merchant Bank Jun 17, 2009 12:41 PM

Hello I can help you. Please email at funds@innovativereturns.com and tell me how much is the SBLOC and what it is for ? You should be able to get to your local bank if merchant has the liquidity and is in good standing.

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LUCKIEST 7,933 posts since
Aug 6, 2007

2. Re: Stand-By Letter of Credit from Merchant Bank Jun 17, 2009 12:41 PM

in response to: LUCKIEST

Stand-By Letter of Credit are the number one solution for real estate developers in this frozen credit market.
*Stand-By Letter of Credit are secondary collateral,which means that they are only called upon in the event of default by the borrower.**
Stand-By Letter of Credit, which are leased bank instruments, are obtained only through Stand-By Letter of Credit Attorneys, who have hedge funds that back their cash reserves.
The hedge fund then arranges with a bank for the issuance of the Stand-By Letter of Credit by depositing cash
in the face amount of the letter with that bank.
LUCKIEST

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phanio 483 posts since
Apr 7, 2009

3. Re: Stand-By Letter of Credit from Merchant Bank Jun 20, 2009 9:35 AM

Will the other party to your business deal accept the SBLOC? If so, that would be all you need.

Business Money Today

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PaperToucher 7 posts since
Aug 11, 2008

4. Re: Stand-By Letter of Credit from Merchant Bank Jun 23, 2009 12:35 AM

in response to: phanio

Hello To All

Apoligizes for the delayed response.

When I received this SBLC, I was under the impression that it was from a bank (merchant bank). The person who is
giving me the loan is actually a manging member of his company, not a banking entity. The letter was actually for
me to see and NOT go to a bank, but to find a bank that will honor this SBLC.

What I was told by several sources is the only way any bank will honor this, is if this SBLC is indeed from the
sellers bank (issuing bank) to me (the buyer) and to a confirming bank. Is that how it works?

Thanks

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billd123 1 posts since
Aug 17, 2009

5. Re: Stand-By Letter of Credit from Merchant Bank Aug 17, 2009 12:53 PM

in response to: PaperToucher

Is this a cash backed SBLC? Do you own it or are you only a beneficary?
Is what you are trying to do is use this other persons SBLC to provide you funding for your business, which he will give you as a loan?
How much is the SBLC for?

Return the post, maybe we could talk off line in regards to this issue.

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financier1 1 posts since
Aug 21, 2009

6. Re: Stand-By Letter of Credit from Merchant Bank Aug 22, 2009 6:04 AM

in response to: billd123

It's important to note that in the event a SLC is issued to you, be careful as to the issuer. Issuers are generally top US Banks and the beneficiary (the one who will accept the SLC) may only approve the SLC for a certain percentage of the SLC's face value. For example, you are issued SLC for 100M, the beneficiary may chose to accept only 30% of the face value or 30M.

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LUCKIEST 7,933 posts since
Aug 6, 2007

7. Re: Stand-By Letter of Credit from Merchant Bank Aug 22, 2009 9:50 AM

in response to: LUCKIEST

No matter how good the business system is, the business
must be one that "fits" you. It must be a business that builds on YOUR strengths
and
talents.
Achieving your dream: It
is good to understand your options and determine what is best for you.

The three basic options are:
1. Start a business from scratch
2. Buy an existing business
3. Purchase a franchise

I have just joined a group of Franchise Consultants. The
company specializes in helping people learn about many of the possible
investment choices that exist in today's market.

The services are free to you the prospective buyer. For more
info, email me at " pdeig@juno.com " and please include your phone number.
Thanks, LUCKIEST

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This Question is Possibly Answered

Stand-By Letter of Credit from Merchant Bank

Jun 16, 2009 4:21 PM

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