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POF Proof of Funds and BCL Bank Comfort Letter explained by Geordon Saraveloz

A bank confirmation letter (BCL) or a Proof of Funds letter (POF) is a letter from a bank or financial institution confirming the existence of a loan or a line of credit that has been extended to a borrower. The letter officially confirms the fact that the borrower—typically an individual, company, or organization—is eligible to […]

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BG – Bank Guarantee explained by Geordon Saraveloz

A bank guarantee is a type of financial backstop offered by a lending institution. The bank guarantee means that the lender will ensure that the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank will cover it. KEY TAKEAWAYS• A bank guarantee is when […]

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SBLC – Standby Letters of Credit explained by Geordon Saraveloz

A standby letter of credit (SBLC) is a legal document that guarantees a bank’s commitment of payment to a seller in the event that the buyer–or the bank’s client–defaults on the agreement. The buyer is certain to receive the goods and the seller certain to receive payment. An SBLC is often sought by a business […]

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LC and DLC – Letter of Credit and Documentary Letter of Credit explained by Geordon Saraveloz

A documentary letter of credit serves as a written promise of payment provided by a buyer to a seller. With a letter of credit, the buyer’s funds for the required payment are held in a separate account for use when needed, similar to the process for escrow. The seller receives payment when all of the […]