Letters of Credit & Bank Guarantees

Not every facility involves borrowing money. A Letter of Credit (LC) is your bank's promise to pay your supplier once shipping and documentary conditions are met — letting you buy raw material, often imported, on secure credit terms without paying upfront. A Bank Guarantee (BG) is your bank's promise to pay a beneficiary if you default on an obligation — essential for bidding on tenders, securing advances, and meeting performance commitments.

Because these are non-fund-based — the bank only pays out if something goes wrong — they cost a commission rather than interest, making them far cheaper than a funded loan for the same purpose. For manufacturers buying inputs and contractors bidding for work, a well-sized LC/BG limit is a competitive weapon.

Banks grant LC and BG limits as part of your overall credit assessment, often alongside your working-capital facilities, with a margin and security structure. Getting the limit and the margin right — and choosing inland vs foreign LC, or financial vs performance BG correctly — requires experience. We structure the right non-fund-based limits for how your business actually trades.

LC and BG limits integrate naturally with packing credit, working capital and import finance. We design the whole facility structure together so your funded and non-funded limits complement each other and your cost of doing business comes down.