Possibilities of Being Scammed by Lease BG SBLC Providers

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BG/SBLC- A needle in a haystack
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• Bank Guarantees and Standby Letter of Credit is
  an assurance made by any Bank institutions on
  behalf of a buyer or a seller to settle the
  unsettled loan or sum of money.
• For example, if a buyer is unable to settle the
  amount to the seller, he can issue a guarantee
  request to his bank and the bank will provide a
  guarantee by covering the sum of money and
  proceed to the seller.

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Stand by letter of credit and Bank guarantee

• Also, it can provide the goods to the buyer if
  the seller is unable to do so and request the
  bank to make the purchase.
• This process can be done only if the buyer or
  seller cannot fulfill the deal placed in their
  contract.

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• Standby Letter of Credit is a paper document
  produced by the bank that guarantees to a
  beneficiary on behalf of the buyer or seller and
  is used as a conditional insurance if necessary.
• SBLC is not produced unless either of the parties
  defaults the lease.
• In contrary, SBLC is used only in higher
  commodity and is very rare.

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• If there is no prior negotiation made by the
  parties when SBLC is produced, the owner can
  dispute the lease in court.
• BG and SBLC are almost the same in their process,
  contractual assurance, protection, and security.
• The only difference between them is BG protects
  both the buyer and the seller whereas SBLC
  protects only the seller.

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• The BG will compensate the unsettled contract
  made by the buyer.
• The SBLC cannot protect the buyer since it is
  irrelevant for the seller to get any letter of
  credit from the buyer.
• Similarly, in terms of performance, SBLC will
  make sure that the seller affirms the bank to
  make contractual funds by issuing the letter of
  credits.

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Who provides BG/SBLC?

• Thus making payment faster, even during a
  currency crisis.
• But the performance of BG is different because it
  does not issue any credit to the sales but just
  pledges when there is a critical commitment of
  buyer or seller.

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• Mostly lease BG SBLC providers are difficult
  rather impossible to find since they are dealt
  with private placement investors and brokers.
• The providers are selective on their clients
  where they mostly prefer investors who only
  possess higher Net worth.
• Those investors draw some special financial
  skills to negotiate with the providers hence make
  it worthwhile only between them.

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• In addition, the monetization fails during
  delivery for half of the providers.
• Also, there are higher possibilities of being
  scammed by the investors or the brokers.
  Sometimes a lease can be fraudulent.
• However, some sources claim that BG and SBLC are
  not issued by banks.

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• They are just a deliverer between the buyer and
  the seller where the lease BG and SBLC providers
  passes financial forte (BG or SBLC) to the
  receiver through bank instruments.
• It also asserts that banks are not the initiators
  of BG and SGLC thus leaving a riddle to most of
  the people.

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