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 borrow a specified amount of funds for a specified purpose.
KEY TAKEAWAYS
• A bank confirmation letter (BCL) validates that a bank has a line of credit in place with one of its customers.
• The BLC is not a guarantee of payment, but an assurance of the borrower’s financial resources to complete a purchase.
• Bank confirmation letters are typically issued to business customers vouching for their creditworthiness.
• Bank confirmation letters can also be issued for a company that is entering into a joint venture project with another company.
• Individuals may request a BCL during the purchase of a home or land in order to secure a mortgage or establish creditworthiness with the seller.
Specimen of a Proof of Funds sent via SWIFT MT799
DATE OF ISSUE : XXXXX
ISSUER : PRIVATE BANK
CURRENCY CODE : EUR/USD
AMOUNT : XXXXX
DATE AND PLACE OF EXPIRY : XXXXX
APPLICANT : XXXXX
BENEFICIARY : XXXXX
BANK OF BENEFICIARY : XXXXX
UNDERLYING RELATIONSHIP : XXXXX
WE HEREBY CONFIRM WITH FULL RESPONSIBILITY THAT OUR CLIENT XXXXX HAS FUNDS AND/OR CREDIT LINE WITH US UND HIS/THEIR SOLE SIGNATURE IN ACCOUNT NO: XXXXX THE SUM OF XXXXX. (AMOUNT IN WORDS: XXXXX). THESE FUNDS AND/OR CREDIT LINE ARE CLEAN, CLEARED, OF NON-CRIMIAL ORIGIN AND ARE FREE OF ANY LIENS AND ENCUMBRANCES AND ARE AVAILABLE TO THE CLIENT WITHOUT ANY RESTRICTIONS. FURTHER THIS CONFIRMS THAT WE HAVE PLACED AN ADMINISTRATIVE BLOCK IN THESE FUNDS AND/OR CREDIT LINE IN FAVOUR OF XXXXX WITH ADDRESS AT XXXXX FOR A PERIOD OF 30 DAYS. THE FUNDS AND/OR CREDIT LINE WILL REMAIN UNENCUMBERED DURING THIS PERIOD.
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THIS PROOF OF FUND IS AN OPERATIVE INSTRUMENT.
FOR AND ON BEHALF OF (NAME OF THE ISSUING BANK)
AUT HORIZED OFFICER AUTHORIZED OFFICER
(NAME, TITLE. PIN CODE) (NAME, TITLE, PIN CODE)
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