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F&G - Introduction

Funding and Guarantees is one of the leading private providers of bank instruments services for both institutional and individual clients for decades. Many banks, credit unions, mortgage companies and special purpose lenders are suffering during these times of economic stress and fractured business models. Most people do not know about Bank instruments like MTN's, Bank Guarantees (BG's), Corporate Bonds, SBLC's or other Bank instruments. All they know is that in the arena of project financing it is getting harder to get a deal funded!

For those reasons... It makes sense to look at alternative forms of funding.

Bank instruments are debt instruments created by large banks and institutions which have high interest rates, and strong value to the holder. The more common bank instruments are Bank Guarantees (BG's), Standby Letters of Credit (SBLC), and Medium Term Notes (MTN's), and they are issued by European banks mostly. Since it is very hard to attain the funds to purchase an instrument in full, many choose to utilise leased bank instruments.

Leasing Instruments is great for this and many others reasons, and has become popular over the recent years. Many clients lease bank instruments to get into private placement programs, secure funding for large real estate transactions, commodities and petroleum, and many other unique funding scenarios.

The vital part is that bank instrument leasing makes it possible to use a small amount of capital to attain a large amount of capital for a period of time. If you have the right opportunity, leased bank instruments can be a perfect fit to get you off the ground

Important Tips to Note

Even though this might not be a good introduction, let’s be honest: LEASING usually is a frustrating field to work in. WHY ? Because clients need the instruments but usually they do not have what is needed to get them.

Clients / Applicants need Bank Instruments to be used as collateral or to enhance credit facilities but only fully cash backed instruments may achieve that. There are 2 (two) kinds of sources to lease from:

A). Brokerage firms handling third party instruments offering a list of them available.
B). Real providers offering their own instruments backed with their own funds.

When dealing with firms offering long list of instruments available you can see them issued but you have to ponder the fact they do not have control over them. By the other hand, when dealing with OWNERS, they have full control to instruct issuing banks to emit the instruments or previous evidences of them, such as preadvise communications or screen print-outs, because these instruments are cash-backed with their own funds as well.

Clients / Applicants should understand that in every case, the total facing value amount of the required instrument must be in lender’s account, blocked for the entire useful life of the asset. This is why there is no serious source able to lease without up-front payments to cover lender’s risk of having full facing value amount in place and (to be) blocked.

This is the reason why leasing is considered as a “funds first” transaction, which is the difficult aspect for borrowers to afford when they urgently need the instrument but have no money to get it. Sometimes, borrowers wrongly think they are qualified to get the instrument just against a strong promise, named as contractual agreement, conditional swift, ICBPO or similar.

If you are aware of all this, really interested to lease from a real provider who is able to submit his own fully cash backed instruments to be issued at the name of clients/applicants from prime banks, our procedures and forms to apply for bank instruments are available upon request, Please click here to Contact Us 


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