Business Solutions

Direct Personal Funding

Personal funding is when an individual uses their own funds to support a project or business. This can include using savings or borrowing money.

How to Find a Funder

• National Agencies: Explore grants, funding programs, and incentives from national agencies.
• Private Firms: Look for local and global private funding firms that support startups.
• Crowdfunding: Raise funds for a project by asking a large number of people for small amounts of money.

Other Sources of Funding

• Equity Capital
• Private Equity
• Venture Capital
• Donations
• Grants
• Subsidies

Self-Funding Self-funding is when an individual uses their own savings to fund a business or project. Many successful companies have used self-funding to grow and expand.

Letter of Credit (LC)

A Letter of Credit (LC) is a document that guarantees payment from a bank to an exporter for goods shipped to an importer. It’s a trade finance tool that protects both the buyer and seller.

How It Works

• The buyer requests a letter of credit from their bank.
• The bank issues the LC, authorizing a third party to draw on the bank up to a certain amount.
• The exporter ships the goods and provides the required documentation to their bank.
• The exporter’s bank presents the documentation to the buyer’s bank.
• The buyer’s bank pays the exporter as long as the documentation meets the terms of the LC.

Benefits

• Helps importers secure business with new clients in foreign markets.
• Provides reasonable payment terms for importers.
• Offers security and payment assurance for exporters.

Bank Guarantee (BG)

A bank guarantee is a written agreement between a bank and a customer that the bank will pay a third party if the customer fails to fulfill their obligations.

How It Works

• The bank acts as a guarantor for the customer’s obligations.
• The bank guarantees to pay a third party (beneficiary) if the customer defaults.
• It can be used for financial obligations, such as loan repayment, or performance-based obligations, such as a service provided by one party to another.

Types of Bank Guarantees

• Advance Payment Guarantee
• Security Deposit Guarantee
• Custom Tax or Custom Duty Guarantee
• Cheque Guarantee
• Tender Guarantee
• Performance Bond Guarantee
• Sub-Contract Guarantee

Benefits

• Increases trust in business transactions.
• Helps secure large contracts and financing.
• Reduces financial risk for businesses and partners.

Standby Letter of Credit (SBLC)

A Standby Letter of Credit (SBLC) is a legal document that guarantees payment from a bank to a third party if the buyer defaults on a contract. It’s a financial safety net that helps sellers feel confident about a transaction.

How It Works

• The bank issues the SBLC on behalf of the buyer.
• The SBLC specifies the amount the bank will pay to the seller.
• The seller can demand payment if the buyer doesn’t pay on time.
• The bank pays the seller if the buyer defaults.

When It’s Used

• Often used in international trade.
• Helps businesses secure contracts.
• Allows buyers to negotiate better terms and conditions.

How to Get an SBLC

• The applicant must apply for the SBLC.
• The bank evaluates the applicant’s creditworthiness.
• The applicant pays a fee for each year the SBLC is valid.