About Us
Financial Engineering
- Financing high value business ventures by traditional banking methods may pose an unnecessary burden on the project owner as a legal charge on assets as personal guarantees are invariably required by lenders.24kGROUP Ltd provides innovative business funding solutions whereby leasing a Bank Guarantee (BG) or Standby Letter of Credit (SBLC) can help your business to enhance its credit and raise the project finance required. Our U.K based company is headed up by a team of finance professionals who have over 30 years experience in banking and trade finance and are ready to assist you.
- We can arrange for your business to lease a BG or SBLC issued by a top 50 world bank in order to secure finance for your project. This is achieved by our company working directly with a provider who can deliver results.If you already have a credit facility approved for your project then we will arrange for the required bank instrument to be delivered by SWIFT MT- 799/ MT-760 to the beneficiary account of the receiving/ funding bank. If you do not have funding in place then we can arrange a non-recourse loan and monetise a Bank Guarantee or Standby Letter of Credit for you. The process is simple but only works if the client collaborates and works closely with us, the bank instrument provider and monetiser through the entire transaction process.
- In the case of non-recourse funding via a leased BG or SBLC, as explained further, the monetiser will require the client to enter into a Joint Venture Private Placement Program which will pay out a share of the trading profits for project funding purposes. For high net worth clients who are interested in investing in a Private Placement Program (PPP), 24kGROUP Limited is able to make introductions to trading desks which operate in London, Frankfurt and Zurich.
Bank Guarantee/ Standby Letter of Credit
- The term "leasing" of a Bank Guarantee (BG) or Standby Letter of Credit (SBLC) is widely used but is a misnomer as there is no reference to a lease in the contract between a Provider and client. What is meant is that the client has the unrestricted ownership of the bank instrument for a period of 1 year (but has to return it to the issuing bank before expiry). As far as the receiving (monetising) bank is concerned, the BG/ SBLC is cash backed and is delivered to the beneficiary account for which a loan or credit line is granted. The Provider agrees to use his assets for the benefit of a third party, the Beneficiary. This is achieved through a Collateral Transfer Agreement whereby the Provider pledges assets to the issuing bank and instructs the issue of a Bank Guarantee or Standby Letter of Credit to the Beneficiary and his receiving bank. The underlying assets pledged to the issuing Bank may be in the form of cash, bonds, stocks, gold or other assets.The contract between the Provider and Beneficiary for the given term binds the Beneficiary to accept the terms of the issue of the BG/ SBLC and to pay a service charge to the Provider for its use.
- We are able to arrange the issue of a Bank Guarantee or Standby Letter of Credit from a Top 20 World Bank for a term of 1 year. The minimum value is US$ 100 million and the cost quoted will depend upon the value required but typically ranges between 12% - 15% of the face value of the instrument including a 2% fee.
Bank Guarantee/ SBLC funding
- A distinction must be made between owned and leased bank instruments. Where a BG/ SBLC is owned by a client and being monetised i.e. sold, the buyer will not have a problem in drawing down a line of credit from his bank as the instrument will serve as security and is callable by the beneficiary at maturity dateIn the case of a leased BG/ SBLC which has to be returned to the issuing bank prior to maturity, the monetiser has the responsibility of repaying the credit facility to his bank and will not normally pay the BG/ SBLC applicant a non-recourse cash sum. However, this issue can be overcome by the client entering into a Joint Venture Private Placement Program with the funder.For a BG/ SBLC buy/ sell transaction, the monetisation process typically takes 5 - 10 banking days from receipt of a completed Client Information Sheet. In the case of BG/ SBLC funding via a PPP, the process will take 15 - 20 banking days.
Private Placement Program (PPP)
- Minimum investment is US$ 20 million and trade profits depend upon the level of funds invested. Historically, minimum monthly client returns are 75% for a 40 week trade program depending upon availability and market conditions. For investments over US$ 100 million, the client may be offered a bullet program in conjunction with a 40 week trade where payment of profits may be accelerated and made within 3 to 30 days. If client funds are on held on deposit in a top 50 world bank then they can usually be blocked bank to bank by an MT-799/ MT-760 funds reservation. Otherwise, the trader will require the funds to be transferred into a non-depletion account which will be under the control of the client.The client will need to submit a detailed KYC (available on request) and supply a Proof of Funds in the form of a Bank Confirmation Letter or recent bank statement/ tear sheet.