Letters of Credit Are Not Mail-Order Instruments

5 min readJul 15, 2022
Image by Roland Schwerdhöfer from Pixabay

We get bombarded with requests for letters of credit daily, thankfully our marketing funnel eliminates most internet trolls.

Who started the false rumours online about letters of credit being available for sale or leasing? Now the myth has gone viral.

An army of brokers from all walks of life, are spending their days trying to find a ‘’genuine letter of credit provider’’ without even understanding how money markets actually work.

Common Misconceptions

The email usually goes as follows:

‘’I have a genuine Buyer for a top rated bank SBLC for 1,000,000,000 dollars in 2 tranches. No Upfront Fee.’’

In the past we attempted to educate the prospects about what letters of credits are and how they actually function, but in doing so, we’ve faced enormous backlash, some even labelling us scammers for simply telling them the truth.

Please, if you are one of those people who believe that collateral can simply be ordered, utilised and paid for after you’ve had access to it, without consideration for your transaction history, credit score, based on what the brokers & internet trolls call a ‘’DOA’’, seek professional advice immediately.

And if you’re not willing to spend money on consultants, books or courses to learn how this business actually works; you’re in for a frustrating decade.

You could lose decades of your life chasing things that do not exist. This is very serious. Ignorance is a choice when there is so much information available out there.

The So-Called Procedure

Typical procedure used by internet trolls and brokers is the following:

1.‘’DOA’’ signature.

2.‘’Seller/Lessor’’ issues MT-760.

2.‘’Receiver’’ pays the ‘’purchase/lease rate’’ within X number of days.

As good as this may look on paper, this procedure is incredibly stupid, it implies that anyone with a bank account, can simply sign an agreement with someone online, receive a letter of credit afterwards and of course, pay the issuer.

Free money printer? Infinite money glitch? Life hack? You name it.

If such thing existed, everyone would be doing it.

The worse part about the above is that none of the participants in those fictitious transactions are willing to learn, or admit that they’re wrong and simply wasting their time.

Each time a transaction fails, they move on to the next, with the same groundless beliefs without ever trying to educate themselves by hiring professionals or reading books about the industry they’re in.

Professionals in the trade finance industry, especially those who transact at that level often have 7+ years of studies under their belt, and 10+ years within the banking industry.

But brokers and internet trolls believe that simply because they have an inbox, WhatsApp and a company with 100 USD in share capital, they are now qualified and entitled to receive services on their terms.

‘’I will not pay a penny upfront. Not even for a consultation.’’

According to those trolls every service provider, lawyer, investment banker, corporate finance consultant who issues retainer invoices for advisory services is a scammer. The work must absolutely be done without ‘’upfront fees’’. Delusional.

Those bad actors wholeheartedly believe that they will insert their 2% commission box in a contract, get a liquidity provider to commit millions of dollars based on a fictitious document they call a ‘’BPU’’… and then miraculously earn seven to eight figure sums after sending 3–5 emails and attending a couple Skype or WhatsApp calls. It’s beyond me.

There are only two or three ways to raise a letter of credit.

  1. One is through your own bank.
  2. The other one is by partnering with a liquidity provider, and his bank.
  3. The third way is to receive it from one of the parties who buys goods from you.

To demonstrate the absurdity behind what most internet trolls suggest when they ask for a letter of credit purchase/leasing, which by the way does not exist:

1.To issue standby letter of credit, a collateral provider typically needs to have the funds in full available on his bank account or credit line equivalent to the SBLC’s face value. There must be an underlying commercial motive, such as the import of goods.

2.This means, the provider ALREADY HAS FUNDS and there is no incentive for him/her to ‘’sell’’ the line of credit in exchange for a ‘’purchase or lease fee’’.

But it’s hard for trolls to believe in this truth. According to their thesis, because they have a bank account, the provider should transfer the line of credit based on a ‘’DOA’’, and they will pay the provider in return for transferring the letter of credit.

It’s the same as telling someone;

‘’Hey, transfer me 50,000,000 dollars. When I receive the funds, I’ll send you back 5,000,000 dollars. Don’t trust me? Well, my bank can issue a ‘’BPU’’’…

Except asking for cash openly would make them look incredibly stupid, so they prefer to ask for standby letters of credit, as if those were mail order instruments.

Anyone with a corporate account can receive letters of credit.

If you have a legitimate business that requires debt or equity funding, don’t try to reinvent the wheel.

Hire qualified service providers to help you raise the capital you need for expansion.

Stop wasting your time online brokering absurd deals or trying to ‘’buy’’ instruments that can’t be sold in the first place.

Just because your bank can receive letters of credit, doesn’t mean someone will commit capital to you without a valid commercial motive, a credible security offering, guarantees and financial commitments from your end.

Forget about BPUs, MT799s and all that jargon.

Most of it has been adopted by illiterate brokers, who genuinely believe in getting rich overnight by trading millions of barrels of petroleum, thousands of tonnes of gold and billions of dollars of non-existing collateral as they often describe in their LinkedIn bios ‘’MTN, BG, SBLC, DLC,PPP’’…

Typical Trolling Accounts on LinkedIn

It’s a really dark place and the best way to escape it is to educate yourself about the industry you’re in before trying to get rich quick.




We're a corporate finance advisory firm that helps clients tap into global capital markets in order to raise funding. Visit financely-group.com.