Letter of Credit Advisory & Brokerage
Blades International Has The Trade Finance Knowledge You Need.
Blades International knows the ins and outs of international trade finance, and has the relationships you need to arrange the most advantageous Letter of Credit transactions. We work with a range of banks and offer valuable assistance in efficiently obtaining lower priced Standby and Export Letters of Credit. As independent brokers, we’ve helped clients enjoy tremendous savings.
Key areas
On your behalf, we provide expert guidance in these key areas:
Structuring
Pricing, including fees for:
Term Arrangement & Pricing
If you spend more than $10,000 a year on Letter of Credit transactions, read further for savings.
Through our various bank relationships, we have helped companies achieve better terms, lower pricing and exceptional service. At Blades International, Inc., our goal is to bring more transparency and competition to the market.
Chances are, your bank doesn’t explain what type of return on capital they make on your transactions. The risks on Trade Standby Letters of Credit and Export Letter of Credit confirmations are historically lower than on Financial Letters of Credit. Consequently, the capital required, and therefore the pricing, should be even lower.
40% or 80%
In some cases, banks earn returns on capital of 40% or 80% when they confirm your Export Letter of Credit.
About half
Bank capital requirements on confirmed Export Letters of Credit, Commercial Letters of Credit and Performance, or Trade, Standby Letters of Credit, are around half of what they would be for issuing a financial Standby Letter of Credit.
Letter of Credit Questionnaire
The following is a set of questions that covers part of the initial process we go through in helping our clients:
- Do you compare confirmation fee quotes when you have an L/C directed to one of your banks?
- Do you negotiate the confirmation price?
- Have you ever directed an L/C to another bank for a lower cost confirmation once the first bank has advised it?
- How price sensitive are you to export L/C fees? Do you look at the overall good service of a bank and simply pay whatever is quoted?
- What kind of return on the bank’s capital do you think they earn on your export L/C confirmations—25%, 40% or 80%? What should they earn off of your L/C if a target is 18% for a bank?
- Did you know that bank capital requirements on a trade standby L/C are about half of what they would be for issuing your financial standby L/Cs?
Show all 23 questions ↓Show fewer ↑
- The risk is historically lower on a trade L/C and, therefore, some in the industry say the capital required should be even lower. Do you agree?
- Even when there are challenges and discrepancies, most commercial or export L/Cs seem to work out. Has this been your experience?
- In the case of a large L/C, have you ever negotiated to pay your confirmation fee quarterly in arrears?
- Have you ever negotiated the ability to prorate a confirmation fee if you ship early or don’t need the L/C?
- If you pay a confirmation fee, does your bank help make sure you will not have discrepancies? Are you aware that a discrepancy can cancel out your confirmation?
- Have you ever compared the cost of Ex-Im Bank Insurance on a foreign A/R versus a confirmation?
- Have you ever agreed to work with your bank on an export confirmation to provide a supplier certificate so that they could use an Ex-Im Bank policy to insure 95% of the confirmation risk?
- Would you be interested in a website from an L/C broker that shows you Ex-Im Bank insurance charges on L/Cs in the countries they cover?
- Would you confirm more export L/Cs if the prices for confirmations were significantly lower?
- Have you ever negotiated to have a confirmation done only a couple of weeks before shipment to save costs?
- Have you ever negotiated to pay only for the days you need versus paying for “90 days or part thereof”?
- Have you ever paid for 180 days of confirmation coverage when the risk was only outstanding for 120 days?
- Would it appeal to you to know what fees other exporters have paid to banks for similar confirmations?
- If you pay $50,000 a year in export L/C fees, is it worthwhile to lower down to $30,000 with better information and negotiating?
- Does your export L/C pricing reflect the economies of scale deserved for combining all your banking activity?
- Do you ever pay 12bps or .12% for a negotiation, as it is standard?
- Do you ever do assignments of proceeds? And pay significant fees?
If these questions, and your answers, make you wonder if you’ve been paying too much for letters of credit transactions, we should talk.
L/C Information
Here’s an example of the format for providing L/C information:
Thank you in advance for helping us identify potential opportunities for improving the terms and pricing for your letters of credit.
| Maturity | 90 days |
| Foreign bank | A foreign bank |
| Amount | $2,000,000 |
| Advising fee | $250 |
| Negotiation fee | .05% flat |
| Confirmation fee | .25% per quarter or part thereof |
| Acceptance fee | .50% per annum |
Complimentary Consultation
We believe we can help you streamline operations and save money in the process.
That’s why we offer you one hour of complimentary consultation in exchange for your historical letter of credit fee information. We’re not interested in any of your confidential arrangements; quite the contrary. We’re simply interested in knowing the amounts, maturities and, most importantly, any advising, negotiation and confirmation fees you were charged, as well as the acceptance fee and discount rate you paid to specific banks on any time drafts.