How to Convert an MT760 into Cash: The Truth About SBLC Monetization

Standby Letters of Credit (SBLCs) are commonly misunderstood, especially when it comes to monetization. Many believe that simply obtaining an MT760 (the SWIFT message for SBLC issuance) means instant access to cash.

The reality is more nuanced—banks do not just hand out loans against an SBLC without proper evaluation. If you’re looking to convert an SBLC into cash, here’s what you need to know.

What is SBLC Monetization?

SBLC monetization (also known as discounting) refers to using a Standby Letter of Credit as collateral to secure a loan or credit facility. This process is not automatic—an SBLC alone is not enough. Lenders will underwrite the deal, assess risk factors, and determine whether to provide financing.

How SBLC Discounting Works

If an SBLC is accepted for monetization, the lender may advance a percentage of its face value, usually at a discount. This is why it’s called SBLC discounting—you never receive the full face value upfront.

The discount rate depends on:

• Issuer’s credit rating – Banks will not take an SBLC from an unknown or unverified institution.
• Tenor of the SBLC – Shorter durations may reduce risk, but also lower advance percentages.
• Applicant’s financials – A strong financial profile improves chances of higher funding.
• Use of funds – Lenders prefer structured transactions with clear commercial purposes.

Without supporting contracts or business viability, the SBLC alone won’t be enough to secure financing.

Underwriting Process for SBLC Monetization

Banks and private lenders don’t simply accept SBLCs at face value—they assess the entire network of contracts surrounding the transaction. This includes:

• Commercial agreements – Are there binding contracts that justify the need for financing?
• Financial statements – Can the applicant demonstrate the ability to repay?
• Trade history – Is there a track record of successfully executing similar deals?
• Regulatory compliance – Are the parties involved compliant with AML and KYC requirements?

Without a legitimate business case and financial strength, no lender will extend credit simply because an SBLC exists.

SBLC Monetization is Not a Magic Solution

Many brokers and so-called “facilitators” promote SBLC monetization schemes promising instant liquidity. These claims are misleading—lenders require due diligence, risk assessment, and structured financing arrangements. An SBLC without supporting financials and contracts won’t unlock cash.

If a Deal is Fundable, an SBLC is Unnecessary

In cases where a transaction qualifies for funding on its own, banks don’t require an SBLC. Instead, they can accept other forms of collateral or structured guarantees. The reality is that securing an SBLC and then obtaining a loan from a bank is an uncommon funding arrangement—it’s simply too expensive.

• The cost of issuing an SBLC is already high.
• A separate bank loan adds additional fees and interest.
• Lenders prefer direct pledges or other guarantees rather than layering an SBLC over another financing structure.

This is why legitimate funding rarely involves obtaining an SBLC first and then seeking a loan—the costs outweigh the benefits, making it impractical for most transactions.

Need an SBLC? We Can Help

If you require a performance or financial SBLC, we can assist. We also have access to lenders who can put up collateral—subject to deal evaluation, of course. No shortcuts, no gimmicks—just real financing solutions backed by legitimate underwriting.

Looking to structure a trade or project finance deal? Get in touch.