Bank Guarantees
A bank guarantee or BG is a pledge by a bank to make good on someone’s debt in the event that he or she cannot pay it. Bank guarantees are similar to the bank standing as a cosigner on a transaction; in the event that the original party cannot follow through, the bank can be called upon to provide the payment to complete the transaction. Many banks provide bank guarantees as a service to their clients for the purpose of facilitating large business transactions and deals.

Stand By Letter of Credit (SBLC)
A Standby Letter of Credit is very similar to a Bank Guarantee and are employed in similar situations. A Bank Guarantee or Banker’s Guarantee (BG) is a banking arrangement where a bank agrees to substitute its own credit in place of its client. Different from a traditional Line of Credit (which is intended to be paid) a Bank Guarantee is a contingent obligation. We say contingent meaning that it is dependent on the happening of an event, which may or may not actually ever occur. More often than not a BG is not paid because the event, project or deal does not happen, i.e. the deal never goes through or the project never gets off the ground.

Non-Recourse Debt or Non-Recourse Loan
A Non-Recourse Debt or Non-Recourse Loan is secured by a pledge of collateral, typically Bank Guarantee or Standby Letter of Credit, but for which the borrower is not personally liable. If the borrower defaults, the lender can liquidate or sell the collateral (Bank Guarantee or Standby Letter of Credit) but if the collateral sells for less than the debt, the lender cannot seek that deficiency balance from the borrower—its recovery is limited only to the value of the collateral. Our nonrecourse loan is typically limited to 65% to 85% loan-to-value ratios.

Performance Bonds
A performance bond, also known as a contract bond, is a surety bond issued by a financial service company or a bank to guarantee satisfactory completion of a project by a contractor. The term is also used to denote a collateral deposit of good faith money, intended to secure a futures contract, commonly known as margin. A job requiring a payment and performance bond will usually require a bid bond, to bid the job. When the job is awarded to the winning bid, a payment and performance bond will then be required as a security to the job completion.

Proof Of Funds
A Proof of Funds is a financial document and cash asset that proves a party has the capability and funds to complete their side of a transaction. This financial document is most often provided in the form of a bank, security, or custody document for a specific transaction. The Proof of Funds letter assists the selling or lending party with confidence there are cash funds available, that they are obtainable and legitimate.

RWA Letter
A Ready Willing and Able Letter (RWA Letter) is a bank instrument that verifies a bank or financial institution is Ready Willing and Able (RWA) to proceed on behalf of a client in any number of various financial transactions. An RWA Letter is usually sent from a buyer’s bank to the seller’s bank and is commonly sent together with a SWIFT MT-799.

SBLC or BG via SWIFT MT-760
SBLC stands for Standby Letter of Credit and is completely different from a Line of Credit or a Documentary Letter of Credit. An SBLC’s use and function is similar to a Bank Guarantee (BG). Due to regulations, US financial institutions are not able to offer many or any BG services so changing the legal wording of Letter of Credit became a crafty way to get around the laws. Consequently, Standby Letters of Credit began to be issued as a sort of legal loophole that continues to be used today. The code for an SBLC is SWIFT MT760.

Swift MT-760
The MT-760 is a type of SWIFT message that is often requested in import and export trading due to the fact that it functions in a similar manner to a Bank Guarantee, although it carries with it a significantly higher level of risk for the issuer (typically the buyer), and a reduced level of risk for the recipient or beneficiary (typically the seller). In laymen’s terms, an MT-760 is a SWIFT message, which guarantees that a bank will make payment in favor of a client of another bank.

Swift MT-799
Having a professional that knows what banks are willing to issue a SWIFT MT-799 and what requirement they have will save you a lot of time and heartache. An arrangement is made with the purchasers’ bank to have an MT-799 wired to the seller’s bank. Many banks are unwilling to issue MT-799′s, for the mere reason that doing so would make them liable for the full cost of the said transaction, leaving the bank liable for millions of dollars. A bank will not issue an MT-799 without collateral to secure its interests. Bank charges and fees vary but be prepared, this process is certainly not free.

Leased Bank Instruments
Depending on availability, the Bank Instrument/Collateral offered is in the form of Certificate of Debt and can be a BG ,MTN, Bond, Note, CD with delivery via Swift MT 760. Bank Instruments can also be delivered in the form of a Bank Guarantee or a Proof of Funds. Please contact us to inquire and learn more about our services.

Bank Instrument Monetization
Bank Instrument monetization is the process of liquidating bank instruments and converting them into legal tender. Financial Impact Ltd can monetize most owned bank instruments to be used for a number of reasons ranging from project finance, private placement, or import/export among others. On average this can be accomplished in 10 days or less.


A long-term promissory note in which the issuer agrees to pay the owner the amount of the face value on a future date and to pay interest at a specified rate at regular intervals. This is basically a debt by a company which issues a document and promises to pay. 

Certificate of Deposit 

(CD) is a cash deposit into a financial institution that is usually for a term anywhere from one month to 5 years. The depositor receives a certificate that states the financial institution will irrevocably and unconditionally pay the principal and interest upon a certain date and time in the future. This is basically like cash, depending of course on the issuers’ credit rating, which could make borrowing or cashing it difficult.

Credit Enhancement

This is a term used to help individuals, corporations or governments to borrow funds for specific projects including working capital. The form can take place with many different vehicles such as balance sheet enhancement using borrowed assets for specific periods of time, such as bonds, certificates of deposit, debentures, free trading stock from publicly traded entities, bank guarantees, standby letters of credit, medium term notes and GIC’s.


An unsecured bond backed solely by the general credit of a company.


A generic term often applied to a wide variety of financial instruments that derive their cash flows, and therefore their value, by reference to an underlying asset, reference rate, or index. 

Documentary letters of credit – (DLC)

These instruments are basically an absolute guarantee of payment for goods and/or services that the seller requests proof of payment, but the buyer needs assurance of delivery. The term can be from 30 days up to one year.

Due diligence – (DD)

A thorough investigation of a company, undertaken by another company’s underwriter and accounting firm.

Financial Indemnity Bonds 

Are purchased usually from top rated A+ insurers by AM Best to guarantee lower graded financial instruments (wrap) or funding projects to insure payment over a specified period of time. This takes major underwriting efforts and is expensive, usually costing up to

3% of the entire insured amount, and this is paid in front, before the policy is issued.

Guaranteed Investment Contract – (GIC)

This is like an annuity or life product that has a specific term usually 10 years and is backed by an A+ rated or better insurance company that guarantees the entire principal. The borrower only has to make the interest payments. This product is not accessible by bankruptcy, creditors and is judgment proof. This product is very similar to the credit enhancement and is readily acceptable by most banking institutions as collateral and is easily borrowed against.

Medium term notes – (MTN)

These are instruments that are underwritten by financial institutions generally listed in the bankers almanac, although can be issued by corporations that are underlying the guarantee with their own assets. The term is usually more than 2 years and can extend up to 30 years, but most common is ten years, with attached coupons of interest.

Surety Performance bonds 

Are a form of a guarantee with stipulations as to an event or for events to take place, and then when the event does not happen, they step in to insure there will be funds to complete the project. These are instruments that are issued from top rated A+ insurers by AM Best.