Raising Credit Lines against ‘leased’ SBLC’s

Raising Credit Lines and Loans Against ‘leased’ collaterals

9 times out of 10 clients that apply to receive a Standby Letter of Credit through Collateral Transfer are doing so with the intention of raising credit or loans. It may be the case that they do not have sufficient existing security to allow them to borrow funds from their own bank or it may be that they have simply extended their credit too far.

As the collateral injected under Collateral Transfer facilities is worded to support credit facilities, it is possible to use it to secure credit lines and loans, either directly from the Recipient Bank holding the collateral or another third-party lender.

It has been known that some Recipient banks may refrain from extending credit to their customer regardless of the strength of the security that this collateral represents. This is often due to the borrower being newly formed with little or no credit record. It should not be assumed that just because the borrower is the proud owner of a bank guarantee that his bankers will extend credit against it. To the contrary, lending banks will still impose their rigid lending criteria.

In these events, IntaCapital are happy to offer credit line facilities which we can arrange for our clients. Please enquire with us and we will be happy to provide full details.