Back-to-Back Letter of Credit (MT700/MT705) – Scale Multi-Party Trade Without Capital
Ensure Secure & Reliable Global Trade Payments | 100+ LC-Secured Projects | Global SWIFT Bank Network Connected
📌 Expand Global Trade with Back-to-Back Letters of Credit (MT700/MT705)
⚠️ Have You Missed a Deal Due to Lack of Capital or Supplier Financing?
Recently, a broker lost a $2M contract because they couldn’t pay their supplier upfront. With NNRV’s Back-to-Back LC structure, they secured funding using the buyer’s LC—deal salvaged and margin retained.
🧠 « Without NNRV’s back-to-back LC setup, I couldn’t have delivered. They structured the deal with precision. »
📌 What is a Back-to-Back Letter of Credit?
A Back-to-Back Letter of Credit (MT700/MT705) is a powerful trade finance instrument that allows an intermediary (such as a trader, broker, or wholesaler) to use a Master LC from the buyer as collateral to issue a Secondary LC to their supplier. It bridges the gap between buyer and supplier without needing upfront capital.
At NNRV Trade Partners, we structure secure and compliant Back-to-Back LCs with top-tier financial institutions to help intermediaries manage complex trade deals confidently.
This solution allows businesses to secure an LC from their buyer and use it as collateral to issue a secondary LC to their supplier. It’s the ultimate tool for intermediaries managing multi-party transactions efficiently and securely.
✅ Facilitates Intermediary Trade: Enables traders to complete deals without upfront capital.
✅ Leverages Buyer’s Credit: Uses the Master LC as collateral to finance supplier payments.
✅ Ensures Secure Supplier Payments: Guarantees that suppliers are paid upon fulfilling contract terms.
✅ Ideal for Global Trade Brokers & Distributors: Perfect for businesses acting as middlemen between buyers and manufacturers.
🧠 “We managed a $3.5M shipment with two suppliers across continents using one Master LC and two back-to-back LCs.” — Marc K., Global Commodities Trader – West Africa
🔹 How Does a Back-to-Back LC Work?
1️⃣ Buyer Issues Master LC – The importer’s bank issues an LC in favor of the intermediary (trader).
2️⃣ Intermediary Requests Secondary LC – Using the Master LC as collateral, the intermediary’s bank issues a second LC to the supplier.
3️⃣ Supplier Ships Goods to Buyer – The second beneficiary (supplier) ships the goods directly to the buyer with full compliance and submits required documents.
4️⃣ Payment Processed via Both LCs – The bank verifies compliance, releases payments under the second LC, and settles with the supplier.
5️⃣ Final Payout to the Intermediary – Any price difference between the two LCs is transferred to the intermediary.
📄 Key Features of a Back-to-Back LC
🔹 Two Linked LCs: The first LC (Master LC) backs the issuance of the second LC (Supplier LC).
🔹 Cash Flow Optimization: Reduces the need for working capital, allowing intermediaries to scale operations.
🔹 Supports Partial Shipments: Works well for bulk shipments or phased deliveries.
🔹 Buyer & Supplier Security: Protects both parties with bank-issued payment guarantees.
🔹 Compliant with UCP 600: Ensures adherence to international trade finance regulations.
🔍 Who Benefits from Back-to-Back LCs?
✔ Global Trade Intermediaries & Brokers – Secure transactions without capital investment.
✔ Manufacturers & Exporters – Receive guaranteed payments before production or shipment.
✔ Wholesalers & Distributors – Manage multi-supplier sourcing efficiently.
✔ Trading Companies – Facilitate bulk commodity transactions seamlessly.
📄 Required Documents for Back-to-Back LC Issuance
✔ Master LC Copy – A valid LC issued by the buyer’s bank.
✔ Proforma Invoice / Sales Contract – Outlining product details, pricing, and LC terms.
✔ Commercial Invoice – Proof of agreed pricing and payment conditions.
✔ Bill of Lading / Airway Bill – Shipment tracking & confirmation.
✔ Packing List – Detailed inventory of shipped goods.
✔ Inspection Certificate (if applicable) – Ensures quality compliance standards before payment.
✔ Insurance Certificate – Required for high-value goods to mitigate risk.
🏦 Partner Banks & Financial Institutions for Back-to-Back LC (MT700/MT705)
We collaborate with top-tier banks and financial institutions for seamless LC issuance and processing.
🔹 Our Partner Banks Include:
| Bank Name | SWIFT Code | Advantages | Disadvantages | Issuance Fees | Issuance Time | Min. Transaction | Region |
|---|---|---|---|---|---|---|---|
| Bank of China | BKCHCNBJ | Ideal for Asian trade chains | Less flexibility on changes | 0.5% – 7% | 2–6 days | $1M | Asia |
| Standard Chartered (Dubai) | SCBLAEAD | Trusted for complex LC structuring | Documentation-intensive | 0.5% – 7% | 2–6 days | $500K | Global |
| Exim Bank Tanzania | EXTNTZTZ | Emerging market specialist | Longer internal validation | 0.5% – 7% | 2–6 days | $250K | Africa |
| MauBank (Mauritius) | MPCBMUMU | Offshore issuance advantages | Limited international recognition | 0.5% – 6% | 2–5 days | $250K | Offshore |
| ABC Banking Corporation | ABCKMUMU | Fast SME LC issuance | Offshore compliance limits | 0.5% – 6% | 2–5 days | $250K | Offshore |
| Access Bank Kenya | ABNGKENA | Flexible local trade support | Less global LC experience | 0.5% – 7% | 2–5 days | $250K | Africa |
| Dashen Bank (Ethiopia) | DASHTEAA | Good for East African networks | Slower fund confirmation | 0.5% – 7% | 3–6 days | $250K | Africa |
📩 Additional banks available depending on jurisdiction and trade volume.
📢 All transactions comply with ICC’s UCP 600 trade finance standards.
🎯 Why Use a Back-to-Back LC?
| 🔒 Feature | ✅ Benefit |
|---|---|
| Trade Without Upfront Funds | Buyer’s LC is used as security |
| Risk Mitigation for Both Parties | Each side receives bank guarantees |
| Multi-Supplier Coordination | Perfect for complex international trades |
| Dual Control on Pricing & Margin | Trader keeps profit margin protected |
| Full UCP 600 Compliance | Recognized across jurisdictions |
🛠️ Our 5-Step LC Structuring Process
Submit Your Buyer’s LC & Trade Docs
We Draft Your Secondary LC – Tailored to supplier’s requirements
You Approve the Draft – We include price differences and payment terms
LCs Issued via SWIFT (MT700/MT705) – Both LCs sent to respective parties
Goods Shipped, Documents Verified, Payments Released
💬 “Two back-to-back LCs from different banks were needed. NNRV coordinated all parties across 3 continents—flawless!” – L. Moriba, International Trade Consultant – Senegal
🔍 Back-to-Back LC vs Transferable LC
| Feature | Transferable LC | Back-to-Back LC |
|---|---|---|
| Structure | One LC, partially shared | Two separate but linked LCs |
| Flexibility | Limited price control | Full pricing flexibility |
| Re-transfer Option | ❌ Not allowed | ✅ Possible (via new LC) |
| Document Control | Shared between parties | Full control by trader |
| Best For | Traders with same goods | Traders modifying goods/pricing |
💡 Why Choose NNRV Trade Partners?
✔️ Experts in Multi-Layer LC Structuring
✔️ Certified in 40+ Jurisdictions
✔️ Full SWIFT MT700 / MT705 Setup
✔️ “Accepted or Refunded” Guarantee
✔️ Back-to-Back LC Deals from $250K to $100M
✔️ End-to-End Trade Compliance Guidance
💡 Why Choose NNRV Trade Partners for Your Back-to-Back LC?
🔹 Expert Advisory: Comprehensive trade finance consultation & risk assessment.
🔹 Global Banking Network: Secure transactions with international financial institutions.
🔹 Fast Processing: Issued and validated within a few business days.
🔹 Custom Financing Options: Tailored solutions for various industries & transaction sizes.
🔹 End-to-End Support: From LC structuring to fund disbursement & supplier coordination.
📢 Apply for Your Back-to-Back LC Today!
💲 LC Issuance Fees
Fees depend on:
Deal size and LC structure
Bank used for Master & Secondary LC
Risk profile and transaction jurisdiction
🔹 Speak to an NNRV advisor for an exact quote tailored to your project.
🧠 Real Testimonials
“Using our buyer’s LC, we issued two LCs to Chinese and Turkish suppliers. NNRV managed it all.” D. Mbaye, Broker – Francophone Africa
“We had zero capital, but NNRV’s back-to-back LC solution gave us access to global suppliers.” Jessica A., Pharma Distributor – UK/ECOWAS
❓ Top 5 FAQs – Answered by Experts
1. Can the Master and Secondary LC have different values?
Yes. The trader can retain a margin between the two LCs.
2. Do the two LCs have to be with the same bank?
No. We can coordinate with different issuing banks if needed.
3. Is a Back-to-Back LC accepted globally?
Yes. Especially under UCP 600 with SWIFT issuance (MT700 / MT705).
4. Can the LC be used if the buyer is in a high-risk market?
Yes—with a confirmed Master LC and proper structuring.
5. How long does the process take?
Typically 2–6 business days after document verification and payment of fees.
🔗 Related Services
📖 Strategic Blog Posts
Back-to-Back LC vs Transferable LC: Which Is Better for Intermediaries?
How We Helped a Broker Scale From $500K to $7M Using Back-to-Back LCs
Real Case Study: Structuring LCs Across 3 Continents with One Buyer LC
🚀 Get Your Back-to-Back LC Today
Leverage your buyer’s credit to fund your suppliers and grow your international trade business—without using your own capital.
📩 Book Your Free LC Pre-Diagnosis Today
☎️ Talk to an Expert | 🌍 Trusted in 40+ Countries | ✅ $250K to $100M+ Issuance Structuring.