11/05 2016

Dispelling Myths about Bank Guarantees and SBLCs

There is one particular myth that pervades mostly from the United States which says: “There is no way to monetize SBLCs or Bank Guarantees… Anyone who suggests otherwise is simply fraudulent”.  This form of Funding for Large Projects has been going on in Asia and Europe for decades.  It seems that Americans don’t understand what they don’t know.  And if they don’t understand it, then it’s easiest just to believe a myth.  We also call this cognitive dissonance.  But to suggest that ALL BANK GUARANTEE AND SBLC MONETIZATION IS FRAUDULENT, is taking things a bit too far.

Usually the person making that statement went onto the Internet and Googled “SBLC Monetization” for instance and found an article that said all Instrument trades are scams.  And everyone knows you should believe EVERYTHING you see on the Internet right?  So we just want to dispel that myth immediately here right now.  THAT is simply a false statement.  And we’ll outline the Easiest way to monetize an instrument.

The Easiest Way to Monetize an SBLC or Bank Guarantee proves the Myth is Wrong

The Instrument Holder, A.  leased a $100Million Dollar Instrument as a requirement of his funding.  His large local bank instructed him that before getting a loan for his project, Mr. A would need to lease or purchase a $100Million Stand By Letter of Credit.   Mr.  A obtained the Instrument, and made sure that it was: “Assignable, Transferable,…..” and could be monetized.  The Instrument issued from Chase (JP Morgan).  Right away, the reader should be asking themselves: “Wait a minute, how could Chase, Credit Suisse, BofA and all the top banks be issuing fraudulent notes?”  Of COURSE NOT!

Now, Mr. A finishes his project, and there is unused capacity to his instrument.  It still has three months left on the Lease.  At this point his $100Million dollar SBLC is collecting dust.  Being a smart, and prudent businessperson,  Mr. A, under the advise of his AmeriFunding source remembers that he could monetize the SBLC after he completed his project.  He calls AmeriFunding, and says: “Guess what? My Project is completed, and I still have a few months left before my SBLC expires, is there anything I can do to get my unused money back?”   And we reply:  “No, you cannot get your fees back, but we might be able to sell your note for you, there are buyers of instruments out there, and they’d love an SBLC from Chase!”  and Mr. A says:  “But I leased it?”  And AmeriFunding says:  “We know that.  But if we find a buyer, then we will simply buy the note from Chase, give them their proceeds of the sale, and you keep the rest”.

So now enters the Buyer, Mr. B from Detroit.  He needs a $100Million SBLC for his company.  He is willing to pay 65% of the face amount of the instrument, demonstrates proof of funds, and makes an offer to purchase.   At this point AmeriFunding Contacts Chase, explains we have a buyer for the Note.  Chase is paid 42 cents on the dollar, the buyer is paying 65 cents on the dollar… You see where this is headed?  Mr. A will make a cool $20Million on this transaction, minus shipping and handling.

And that is the simplest way to Monetize a Note.  We have buyers contact us EVERY SINGLE day looking to purchase Instruments.  Some of them want to trade notes, some of them want to sell them to large corporations, maybe they want to hold themselves.  But there is a demand for SBLCs.

Frankly, ANYONE who says there is no way to monetize notes, including the FBI, or your local attorney is just ignorant.  They do not understand the market for notes, or that there is an entire world of traders out there some of them look for as much as $100Billion in instruments every day!  To say that SBLCs or Bank Guarantees simply do not have value is gross ignorance.

 

OK,  So SBLCs have a cash value, and anything with value can be traded, I get it. But isn’t this rife with Fraud?

Yes! Of course, anytime you are dealing with instruments in the hundreds of millions you are going to have crooks and liars involved.  We are U.S. based, and our Desk in the U.S. as well.  We are accountable.  That is your first sign that you are probably dealing with fraudulent operators, they move your money overseas where you can’t get it!  You have no recourse, no way of suing them, you have no way of holding them accountable.  Here at AmeriFunding we are accountable, because you can fly to meet us, and see us.  You know where we live!

Another area that is rife with fraud is the “Upfront Fee”.   Whoever is asking for ANY FEE OF ANY KIND will almost certainly NOT be a real Instrument trader.  No fee traders are your sign that they are legitimate.

Lastly, you want to avoid ANY transaction that lists overseas banks on the CIS form, or DOA.   If ANY DOCUMENTS are sent to you that say that the money will move offshore, then do not sign the papers.

 

 

Leave a Comment