SBLC Monetization
Convert a standby issued by an A-rated bank into working capital, without selling assets or waiting for a maturity date.
What monetization is
Monetization turns a Standby Letter of Credit into cash or a credit line. A monetizing bank or financial institution advances funds against the standby, relying on the issuing bank's undertaking as security.
The amount available depends on the issuing bank, the wording and the tenor of the instrument. Standbys issued through A-rated banks can typically be monetized for up to approximately 80% of face value.
Finance House structures new standbys with monetization in mind and reviews existing instruments for eligibility, then coordinates verification, agreement and funding with the monetizing institution.
How Finance House manages it
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Eligibility review
We assess the instrument or the proposed issuance against the monetizing institution's criteria.
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Structure
We align wording, tenor and beneficiary details so the standby is acceptable for monetization.
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Verification
The monetizing institution verifies the instrument bank-to-bank.
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Funding
Funds are advanced under the agreed terms, and we remain the point of contact through to settlement.
Where it is used
Working capital
Liquidity for operations and growth without disposing of assets.
Trade finance
Cash to fund purchases while receivables are outstanding.
Project bridging
Short-term funding while longer-term financing is finalised.
Common questions
Can any SBLC be monetized?
No. Eligibility depends on the issuing bank's rating, the wording and the tenor. We review each instrument individually before committing to a process.
What does monetization cost?
Terms are set by the monetizing institution and depend on the instrument. Your consultant will explain the structure and all costs before you proceed.
How long does monetization take?
After verification, funding is usually a matter of weeks rather than months, subject to the institutions involved.
Discuss your transaction with a consultant.
Tell us about the deal, the counterparty and the timeline. We will come back with the instrument and structure we recommend.