Guides
Trade finance, explained clearly.
Reference guides on letters of credit, standby letters of credit and bank guarantees — how they work, what they cost, how long they take — and straight answers on POF, RWA, monetization and leased instruments.
Instruments and rules
How each instrument works, how they differ, and the ICC rules and SWIFT messages behind them.
Letter of credit (LC): the complete guide to documentary credits
How a letter of credit works: parties, step-by-step flow, LC types (sight, usance, confirmed, transferable), required documents and discrepancies.
Read the guide Guide · Standby letters of creditStandby letter of credit (SBLC): how it works and when to use it
What a standby letter of credit is, how it is drawn, ISP98 vs UCP 600, common uses, key wording, validity and what drives its cost.
Read the guide Guide · Bank guaranteesBank guarantee: types, rules and how it works
Bank guarantees explained: demand vs accessory, bid bond, performance, advance payment, retention and warranty guarantees, URDG 758, counter-guarantees.
Read the guide Guide · Comparing instrumentsLC vs SBLC vs bank guarantee: the differences and how to choose
Letter of credit, standby letter of credit or bank guarantee? A side-by-side comparison of purpose, rules, triggers and SWIFT messages, and how to choose.
Read the guide Guide · SWIFT messagesSWIFT MT700, MT760, MT799 and MT103: what each message really means
What SWIFT MT700, MT760, MT799 and MT103 messages are, who sends them, what each one proves and what it does not, plus the MT799 RWA and POF myths.
Read the guide Guide · ICC rulesICC rules for trade finance: UCP 600, ISP98 and URDG 758
Which ICC rules apply to letters of credit, standbys and demand guarantees: UCP 600, eUCP, ISBP 821, ISP98, URDG 758, and their key concepts.
Read the guideCost, timing and documents
What drives the price, realistic timelines and the documents you will be asked for.
How much does a letter of credit or SBLC cost?
What a letter of credit or SBLC really costs: issuance, confirmation, advising, amendment and discrepancy fees, collateral, and what drives the price.
Read the guide Guide · TimelineHow long does it take to get a letter of credit or SBLC?
Realistic stages to obtain an LC or SBLC: onboarding and KYC, credit approval, wording, issuance, advising and confirmation, and what speeds it up.
Read the guide Guide · DocumentsTrade finance documents: the checklist
The documents a bank or adviser usually asks for: KYC, financials, contract and proforma, and the shipping documents presented under a letter of credit.
Read the guidePOF, RWA, monetization: what is real
Terms you will meet in trade finance offers — what legitimately exists, what does not, and how to protect yourself.
Proof of funds (POF): what it is, what banks issue, and what to avoid
What a proof of funds (POF) is, the forms banks actually issue, what “blocked funds” really means, why “POF for rent” fails, and what to use instead.
Read the guide Guide · RWA lettersRWA letter (“ready, willing and able”): what it commits, and what it does not
What an RWA (“ready, willing and able”) letter is, where the term comes from, what a company or bank RWA does and does not commit, and the red flags.
Read the guide Guide · Standby letters of creditSBLC monetization: the legitimate core, the schemes and the alternatives
SBLC monetization explained: what banks actually do (credit secured by a standby, LC discounting, forfaiting), the red flags and regulator warnings.
Read the guide Guide · Bank guarantees and standbysLeased SBLCs and bank guarantees: how the offers work and what to do instead
Leased or rented SBLCs and bank guarantees: how the offers work, why banks do not issue for unrelated “lessees”, red flags and legitimate alternatives.
Read the guide Guide · Fraud preventionTrade finance fraud: red flags, typical schemes and how to verify
Trade finance fraud explained: fake SBLCs and guarantees, advance-fee schemes, forged documents and payment diversion. Red flags and practical checks.
Read the guideGlossary
- Applicant
- The party that asks the institution to issue the instrument — often the buyer or the contractor.
- Beneficiary
- The party in whose favour the instrument is issued — often the seller or the project owner.
- Issuing bank
- The bank or authorised institution that issues the instrument and takes on the payment commitment.
- Advising bank
- The bank, usually in the beneficiary’s country, that authenticates the instrument and passes it on to the beneficiary.
- Confirmation
- An additional, independent payment commitment by a second bank, added to a letter of credit.
- Compliant presentation
- Documents that match the terms of the credit, the applicable rules and international standard banking practice.
- Discrepancy
- A difference between the documents presented and the terms of the credit, which allows the bank to refuse payment.
- UCP 600
- ICC Uniform Customs and Practice for Documentary Credits, the rules most letters of credit refer to.
- ISP98
- ICC International Standby Practices, rules commonly used for standby letters of credit.
- URDG 758
- ICC Uniform Rules for Demand Guarantees, often used for performance and advance payment guarantees.
- MT700
- SWIFT message used by the issuing bank to issue a documentary credit.
- MT760
- SWIFT message used to issue a guarantee or a standby letter of credit.
- Incoterms®
- ICC rules defining delivery obligations, costs and risks between seller and buyer (for example FOB, CIF, DAP).
Have a transaction that needs an LC, SBLC or guarantee?
Tell us about it in a few lines. We will reply with an honest view of the options and the next steps.
Or write to us at info@starallianceconsult.com