Short answer
For a company that already has an approved trade facility with its bank, a letter of credit or SBLC can often be issued within days of a complete application, once the wording is agreed. For a new client, onboarding (KYC) and credit approval come first and commonly take weeks rather than days. Wording negotiation, confirmation and compliance checks can add time at any stage.
Key points
- The biggest factor is whether you already have a banking relationship and an approved credit line or collateral in place.
- Onboarding (KYC) and credit approval are separate steps, and both come before issuance.
- Agreeing the wording with the beneficiary early avoids amendments, which take time and cost money.
- Once issued, an LC travels by SWIFT MT700 and an SBLC or guarantee by MT760; advising and any confirmation follow.
- No bank can responsibly complete KYC and credit approval for an unknown applicant in 48 hours: “guaranteed issuance in 48h” offers are a red flag.
Why there is no single answer
A bank issues a letter of credit or a standby letter of credit only when two conditions are met: it knows its client (identity, ownership, activity, source of funds), and it accepts the credit risk of paying on the client’s behalf. How long that takes depends far more on your situation than on the instrument.
A regular importer with a trade facility is asking its bank to use a line that has already been approved. A newly formed company approaching a bank for the first time is asking the bank to open an account, run due diligence and take a credit decision, all before issuance. Those are very different journeys.
What are the stages, from first contact to issuance?
| Stage | What happens | What usually determines its length |
|---|---|---|
| 1. Preparing the file | The applicant gathers company, financial and transaction documents. | How complete and consistent the documents are on the first submission. |
| 2. Onboarding (KYC) | The bank identifies the company, its beneficial owners and signatories, and screens for sanctions and other risks. | Ownership complexity, jurisdictions involved, quality of the documents. |
| 3. Credit approval | The bank decides whether to issue on a credit line, against collateral or cash margin, or not at all. | Financial strength, amount, tenor, collateral, internal approval levels. |
| 4. Wording | Applicant, beneficiary and bank agree the text of the credit or standby. | Whether the beneficiary asks for non-standard terms; how quickly each side responds. |
| 5. Issuance | The applicant signs the application; the bank issues by SWIFT (MT700 for a documentary credit, MT760 for a guarantee or standby). | Usually quick once stages 2 to 4 are complete. |
| 6. Advising | The advising bank authenticates the message and informs the beneficiary. | The advising bank’s own checks and relationship with the issuing bank. |
| 7. Confirmation (if required) | A second bank adds its own undertaking. | Whether the confirming bank has a credit line on the issuing bank and its country. |
See our trade finance documents checklist for what a bank usually asks at stages 1 to 3, and our guide to SWIFT MT700, MT760 and MT799 for what each message does.
Existing client or new client: two different timelines
Example (illustrative): Company A has imported regularly for years and holds a documentary credit facility with its bank. It receives a proforma invoice, sends the bank a completed application with the agreed terms, and the bank issues the MT700 once its internal checks are done. The main variables are the bank’s processing queue and any compliance question on the goods or route.
Example (illustrative): Company B was set up recently and has never used trade finance. It must first open an account and pass onboarding, then present financial statements for a credit decision. With limited history, the bank may offer to issue only against a cash margin. Even if the beneficiary’s wording is ready, issuance cannot happen until those steps are complete.
In practice, most delays come from incomplete files, unclear ownership structures, and wording that is renegotiated after the bank has already reviewed it.
What legitimately speeds things up?
- A complete, consistent file at first submission: matching names and addresses, signed contracts, recent financial statements, clear ownership chart.
- Agreeing the wording early with the beneficiary, ideally before the application is filed, and using the bank’s standard formats or wording close to ICC practice where possible.
- Deciding on confirmation early: if the exporter will need a confirmed credit, check upfront whether banks are willing to confirm on that issuing bank and country.
- Securing the credit decision in advance: a trade facility approved before the deal is signed means each transaction only needs an application.
- Offering appropriate collateral, which can simplify the credit decision, although it never replaces KYC.
- Responding quickly to the bank’s questions, through a single, well-informed contact.
Have a real transaction that needs an instrument? Tell us about it in two short steps. We review the operation and reply within 24 hours on business days with the options and next steps.
Discuss your transactionHow should you plan around the commercial deadlines?
Work backwards from the date the instrument must be in the beneficiary’s hands. A seller usually will not ship, and a project owner usually will not release an advance payment, until the credit or guarantee has been received and checked.
- Put a clear deadline for opening the credit or delivering the guarantee in the sales or works contract, and a consequence if it is missed.
- Make sure the latest shipment date and the expiry date in the credit leave enough time to produce and present the documents.
- For guarantees, align the expiry with the contract milestones, and allow for the time needed to obtain an extension if the project slips.
Starting the bank process as soon as the deal is reasonably certain, rather than after signature, is usually the single most effective step.
What slows things down?
- Missing or inconsistent documents, or documents in a language the bank needs translated.
- Complex or opaque ownership, nominee shareholders, or companies in several jurisdictions.
- Goods, ports or counterparties that raise sanctions or export-control questions.
- Beneficiary wording that departs from standard practice, for example no expiry date or payment on demand without any statement.
- Amendments after issuance: each one has to be issued, advised and accepted by the beneficiary before it takes effect.
- A request for confirmation on an issuing bank or country where few banks have lines available.
Why are “issuance in 48 hours” offers a red flag?
Some offers promise a “fresh” or “seasoned” SBLC or bank guarantee, issued by a top bank within 48 or 72 hours, to an applicant the bank has never met. In legitimate banking, this is not how instruments are produced:
- A bank cannot issue in a client’s name before identifying the client and its beneficial owners and taking a credit decision.
- Banks issue instruments to support their own clients’ real obligations, not to unrelated “lessees” (see leased SBLC and bank guarantees).
- An MT799 is a free-format message and does not by itself create an LC, SBLC or guarantee. A standby or guarantee is issued by MT760; a documentary credit by MT700. Under UCP 600, a genuine pre-advice of a documentary credit commits the issuing bank to issue the operative credit without delay; a free-format “pre-advice” sold by an intermediary does not.
- These offers usually require an upfront fee before any bank is involved.
US regulators, including the SEC and the Federal Reserve, have long warned about schemes built around so-called bank instruments. Before paying anyone, use our red flags guide or ask for a verification.
How Star Alliance helps
Star Alliance reviews the transaction, prepares a complete file and the proposed wording, and coordinates with the parties and the issuing institutions so that each stage starts with the information it needs. We cannot shorten a bank’s internal approval or promise a date: the timing and the decision to issue belong to the issuing institution. See how we work.
Frequently asked questions
Can a letter of credit be issued the same day?
For an existing client with an approved facility and agreed wording, issuance can be fast once the application is signed. For a new client, onboarding and credit approval must come first, so same-day issuance is not realistic.
Is an SBLC slower to obtain than a documentary credit?
Not necessarily. The stages are the same: onboarding, credit approval, wording, issuance. Standby and guarantee wording is often negotiated more closely with the beneficiary, which can add time.
How long does confirmation take?
It depends on whether the confirming bank already has a credit line on the issuing bank and its country. Where lines exist, confirmation can follow quickly after the credit is advised; where they do not, the confirming bank needs its own approval, and may decline.
Does offering 100% cash collateral remove the waiting time?
It can simplify the credit decision, but the bank still has to complete onboarding and compliance checks. Cash collateral does not replace knowing the client.
Someone offers an SBLC from a major bank in 48 hours for an upfront fee. Is it real?
Treat it as a red flag. Banks issue instruments for their own vetted clients, after KYC and credit approval, and charge their fees under signed agreements, not through upfront payments to intermediaries.
Sources
- U.S. International Trade Administration — Letter of Credit
- ICC Academy — Trade finance compliance: KYC, sanctions and financial crime risk
- Swift — Category 7 Message Reference Guide (Documentary Credits and Guarantees/Standby Letters of Credit)
- U.S. SEC (Investor.gov) — Investor Alert: “Prime Bank” Investments Are Scams
- Federal Reserve Bank of New York — Investment Scheme Advisory Alert (“prime bank” instruments)
Star Alliance Consulting editorial team · Updated 31 October 2026