Asset/Credit Enhancement

proof of funds

Proof of Funds is the proof of sufficient funds in a bank or brokerage escrow account in your name or your business name. The funds are blocked so you cannot spend the funds.  Many manufactures will not ship large bulk or cargo and freight loads containing their products unless you provide Proof of Funds to prove that you can pay for the merchandise when it arrives. You, as the importer, use the client's money to pay for the merchandise just like a toy store would pay for a truckload of toys upon arrival. POFs are used extensively in importing products such as gold, silver, oil, and for purchasing real estate including bulk REOs.

Bank Account POF funds in a top 25 domestic bank if it is less than $99 Million USD and top 25 off-shore bank if the transaction requires $100M USD or more.

Funds are verifiable by:

  • Standard Account
  • SWIFT MT799 Format
  • Escrow Deposits
  • Fax
  • SWIFT MT760 Format (additional fee may be required)

**All accounts are CASH backed. Accounts are verified on a bank to bank basis ONLY. Clients CANNOT withdraw or encumber funds. Funds are NOT lien-able or callable.
***Contract is for 4 week term, but can be extended for up to 14 consecutive 4 week terms.

Contact CFG today to discover how we can help facilitate your client's transaction seemlessly, efficiently, and painlessly!

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bank guarantee

A bank guarantee is a guarantee from a lending institution ensuring the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank covers it. A bank guarantee enables the customer, or debtor, to acquire goods, buy equipment or draw down loans, and thereby expand business activity.

Bank Guarantees are typically utilized in international trade transactions as collateral and as credit enhancement instruments, while SBLCs are typically utilized Domestically (in the US) for the same purpose. The use of a BGs and SBLCs are advantageous for companies that do not want to risk their own equity/capital. Criss-Cross Financial Group provides all types of Guarantees accepted in international practice such as the following:

  • Payment Guarantee - Issued under the Buyer's instruction in favor of the Seller. Provides execution of the payment obligation by the Buyer under a contract.
  • Advance Payment Guarantee - Issued under the Seller's instruction in favor of the Buyer for advance payment. Provides return of the sum in case goods are not delivered.
  • Performance Bond - Issued under the Seller's instructions in favor of the Buyer as a guarantee of proper fulfillment of contract obligations by the Seller.
  • Tender Guarantee - This type of guarantee is generally an obligatory condition to participate in tender.
  • Credit Guarantee - Provides credit funds

Criss-Cross Financial Group has long-term experience with the provision of premium bank instruments. We specialize in assisting businesses around the globe whose existing bank facilities are unable, or unwilling to meet their requirements.

All Financial Instruments facilitated by Criss-Cross Financial Group are designed to protect your clients commercial interests by eliminating the need to prepay for products or services, or securitize collateral with a bank. Criss-Cross Financial Group is always here to help clients reduce risk and support cash flow. ***All financial products require full client disclosure and are opened in strict compliance with the provisions of the International Money Laundering Regulations and the US Patriot Act.

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Stand-by Letter of Credit (SBLC)

A Standby Letter of Credit/SBLC, as well as a Bank Guarantee/BG is a payment guarantee generally issued by a bank (the issuing bank) on behalf of a client (the applicant) securing payment to a third party (the beneficiary) in case the client fails to fulfill a contractual commitment. Both BGs and SBLCs demonstrate the client's repayment abilities, and prove solvency and/or credit worthiness.

Bank Guarantees are typically utilized in international trade transactions as collateral and as credit enhancement instruments, while SBLCs are typically utilized Domestically (in the US) for the same purpose. The use of a BGs and SBLCs are advantageous for companies that do not want to risk their own equity/capital. Criss-Cross Financial Group provides all types of Guarantees accepted in international practice such as the following:

  • Payment Guarantee - Issued under the Buyer's instruction in favor of the Seller. Provides execution of the payment obligation by the Buyer under a contract.
  • Advance Payment Guarantee - Issued under the Seller's instruction in favor of the Buyer for advance payment. Provides return of the sum in case goods are not delivered.
  • Performance Bond - Issued under the Seller's instructions in favor of the Buyer as a guarantee of proper fulfillment of contract obligations by the Seller.
  • Tender Guarantee - This type of guarantee is generally an obligatory condition to participate in tender.
  • Credit Guarantee - Provides credit funds

Criss-Cross Financial Group has long-term experience with the provision of premium bank instruments. We specialize in assisting businesses around the globe whose existing bank facilities are unable, or unwilling to meet their requirements.

All Financial Instruments facilitated by Criss-Cross Financial Group are designed to protect your clients commercial interests by eliminating the need to prepay for products or services, or securitize collateral with a bank. Criss-Cross Financial Group is always here to help clients reduce risk and support cash flow. ***All financial products require full client disclosure and are opened in strict compliance with the provisions of the International Money Laundering Regulations and the US Patriot Act.

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Bank comfort letter

A Bank Comfort Letter commonly referred to as a BCL is typically used in a commodities transaction to demonstrate the financial capability of the buyer. It is also sometimes referred to as a Bank Capability Letter.

A BCL is one type of a Proof of Funds (POF) which can be furnished by a buyer or requested by a seller to complete a transaction. Various other types of POFs such as SWIFT messages, or a MT 799 SWIFT message may be utilized for the same purpose.

verification of deposit (vod)

A Verification of Deposit (VOD) is a document signed by a company’s or individual’s financial institution that provides verification of the balances in their financial accounts. A written Verification of Deposit will adequately serve the majority of Proof of Funds requirements. Other types of confirmations done with bank-to-bank SWIFT messages are most commonly used for verifications tied to transaction settlements or securities transfers, and sometimes have special account set-up procedures that are available at an additional cost.

documentary letters of credit (DLC)

Documentary Letters of Credit (DLC) are typically utilized by companies seeking to reduce the risks associated with exporting into and/or importing from foreign markets. The use of documentary letters of credit reduces the risk to both buyer and seller in an international sale and can be used for one-time or recurring transactions. The title documents to a shipment and the payment for the same are exchanged between the exporter’s and importer’s banks, respectively. As long as the shipment meets the standards established between the parties, payment is guaranteed.

The main benefits of utilizing a DLC are:

  • The exporter can expand its revenue base by selling into foreign markets with limited payment risk.
  • The importer can buy from foreign markets with limited risk of non-shipment.

Contact Criss-Cross Financial Group Today to find out which product/service is right for your client, and how we can assist in meeting your client's financial objectives!

Definition:
The importer’s bank irrevocably commits for payment provided that the exporter complies with the terms and specifications of the Letter of Credit. Citibank® notifies, negotiates documents and pays to the exporter. If required, can also confirm the Letter of Credit (becoming also an obligor).

Advantages:

  • The exporter has a bank commitment to pay, instead of running the importer’s commercial risk.
  • If Citibank® gives its confirmation, the exporter eliminates sovereign risk from the importer’s country and commerical risk from the issuing bank.
  • Is particularly effective when there is not enough credit history between importer and exporter and the exporter does not want to assume the political risk of the importer’s country.
  • Citibank® has one of the biggest network of branches and correspondent banks around the world by which it is prepared to provide its confirmation.

Please note that:

  • The exporter’s credit line is not affected when using Letter of Credits.
  • The main concern, as an exporter, should be that the documents presented are exactly within the terms required in the Letter of Credit.
    This ensures there will be no delay in the reimbursement of funds due to discrepancies/problems.
  • When receiving deferred payment Letters of Credit issued or confirmed by well-ranked banks, exporters can secure better terms of financing.

Costs:

  • Advising fee: generally a fixed amount.
  • Confirming fee: percentage on the total amount of the L/C, usually per quarter.
  • Negotiating fee: flat percentage on the amount of each negotiation.
  • Other costs: discrepancies, amendments, telex, mail, etc.

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SWIFT Services

One of the most efficient and effective systems for conducting international financial transactions was created in the 1970s.  The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, has revolutionized international trade transactions tremendously over the years.  SWIFT messages are standardized and automated to the point that major transactions can occur smoothly with very little effort.  A few of the more common SWIFT messages are explained below.

MT-799 - When a seller wishes to confirm that a buyer has the funds that will be necessary to complete a specific transaction; the buyer can have his bank issue an MT-799.  This is a guarantee from the bank that the buyer does current have funds in their account to execute the transaction.  However, there is no hold put on the funds, and they are not earmarked in any way for any specific transaction.  Depending on the language, the MT-799 can be irrevocable, but in its standard format it is not to be considered a bank guarantee or a promise to pay.  It is simply assurance that sufficient funds are currently in the buyer's account to complete the transaction.

MT-760 - This SWIFT message is sometimes referred to as a "cousin" to the MT-799.  The reason is that they are very similar, but with some very important differences.  This message also confirms to the seller that sufficient funds are in the buyer's account, but the MT-760 puts a hold on said funds and earmarks them for the specific transaction.  This completely changes the nature of the MT-760 from just a message between banks to an actual negotiable instrument.

MT-103 - This is the most commonly used SWIFT message, and many have utilized it without even knowing it.  It is not typically referred to as an MT-103, but rather a wire transfer.  When bank customers need to make payments to someone in another country, then an international wire transfer, or MT-103, is sent.

Criss-Cross Financial Group has partnered with several financial institutions, as well as private investors, for leased instrument programs that allow us to facilitate a transaction with a small down payment utilizing both major banks and private bank funds. We can facilitate SWIFT messages for anyone including small banks, institutions and corporations. Our financial partner's institutions are able to extend their SWIFT facilities to your entity on a wholesale level, so that you may relay and issue instruments accordingly, as well as have access to large funds for collateral assets.

If you have an interest, or wish to acquire more information regarding our products and services, please contact us, and we will arrange for a compliance officer to be made available to address any questions that you, or your client may have, and more importantly, to assist you with your current transactional needs.

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