How to Obtain an SBLC With Little or No Collateral
How to Obtain an SBLC With Little or No Collateral
Yes — some institutions offer partial-collateral SBLC issuance for bankable deals. Financely helps structure these through SBA-backed lenders, LPs, and private credit providers.
Most commercial banks require full cash collateral to issue a Standby Letter of Credit (SBLC). But in many real-world cases, that kind of lock-up kills the deal. Liquidity disappears, timelines are missed, and companies with good contracts lose opportunities.
Financely helps businesses solve this problem by structuring SBLC-backed transactions with reduced collateral—sometimes as little as 25%, and occasionally less, depending on the strength of the deal and the risk of invocation.
Why Do Banks Require 100% Collateral?
Because they don’t want exposure. Unless the issuing bank knows the applicant well or the credit profile is pristine, most will demand full security. It’s a protective measure, not a signal that your deal is bad—it just doesn’t fit inside their credit box.
Where Financely Adds Value
We work with capital partners who understand real-world risk. These include:
- SBA lenders that can issue an SBLC for as little as 10–25% collateral
- Private LPs who back qualified transactions with pledged funds
- Lenders who issue SBLCs themselves, or co-issue through banking partners
Some SBA lenders, as explained in this SBA article, support SBLC issuance with partial security based on proper underwriting and verified contractual obligations.
Use Case: Solar Project Requiring ERCOT SBLC
A solar developer has a signed Power Purchase Agreement (PPA). To secure access to the ERCOT grid, the utility requests a performance guarantee in the form of an SBLC.
The sponsor can’t freeze $2 million in cash to issue the instrument, but the project is de-risked: permits are in place, PPA is signed, EPC contractor is secured. This is where we step in—syndicating a partial-collateral structure through one of our LPs or SBA-aligned lenders. The SBLC gets issued. The project moves forward.
What Makes a Deal Eligible?
- Valid commercial agreement in place (e.g. PPA, supply contract)
- Track record or experienced sponsor team
- Low risk of invocation — the SBLC is procedural, not credit-protective
- Full documentation ready for review
Where Are SBLCs Issued From?
We coordinate issuance through accounts at globally recognized institutions such as:
- Bank of China
- HSBC
- Citi
- J.P. Morgan Chase
All instruments are issued via SWIFT (MT760), and governed by ISP98 or URDG 758 —ensuring global enforceability, legal consistency, and full compliance with institutional standards.
Types of Transactions We Support
- Renewable energy projects with PPAs
- Import/export contracts requiring performance guarantees
- Infrastructure projects with milestone-based disbursements
- Construction and logistics mandates where upfront security is required
If your transaction is real, and your file is complete, we’ll help you structure a workable solution without freezing your working capital for 12–36 months.
Need an SBLC With Partial Collateral?
We help qualified companies issue real SBLCs through credible partners, even without 100% security. We’ll structure the deal, syndicate the gap, and deliver the instrument—properly.
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