Providing Proof of Financial Capability and Commitment for Large Transactions

A Ready, Willing, and Able (RWA) Statement is a formal letter issued by a bank or financial institution confirming that a client has both the financial capability and the commitment to enter into and complete a specific transaction. It is a crucial document in the world of international trade and large-scale transactions, used to demonstrate the financial soundness of a buyer or seller.

This statement reassures counterparties that the involved party is financially prepared, committed, and capable of performing the obligations outlined in the contract, thus facilitating smoother negotiations and faster deal closures.

Purpose and Importance of RWA Statements

The RWA Statement serves several key purposes in commercial transactions:

• Proof of Financial Capability: It provides assurance to the counterparty that the buyer or seller has the financial resources required to complete the transaction.
• Commitment to the Transaction: It confirms that the party is not only financially capable but also fully committed to fulfilling their contractual obligations.
• Facilitates International Deals: Particularly in international trade, RWA Statements offer peace of mind to sellers and buyers when dealing with unfamiliar counterparties.
• Mitigates Risk: By providing a formal commitment from the bank, RWA Statements help mitigate risks related to non-performance or financial insolvency.

Key Elements of an RWA Statement

An RWA Statement typically contains the following critical components:

1. Financial Capability Confirmation: The bank confirms that the client has the necessary funds available to complete the transaction.
2. Commitment to Perform: The letter states that the client is ready, willing, and able to fulfill the contractual terms.
3. Transaction Details: A description of the transaction for which the RWA is issued, including the amount and type of goods or services involved.
4. Bank’s Assurance: While the RWA does not legally obligate the bank to make payments, it offers a strong indication of the client’s financial health and seriousness.
5. Expiration Terms: The RWA typically has a validity period within which the transaction must be completed.

Common Uses of RWA Statements

Ready, Willing, and Able Statements are widely used across various industries and financial activities, including:

• International Trade: In large trade transactions, particularly when buyers and sellers are located in different countries, RWA Statements provide security to both parties.
• Real Estate Transactions: Buyers and sellers use RWA Statements in real estate deals to show proof of funds and commitment, allowing smoother negotiations and contract finalization.
• Project Finance: RWA Statements are used to secure project financing, ensuring that contractors and developers have the financial backing required to complete large-scale infrastructure or construction projects.
• Mergers and Acquisitions: In M&A transactions, an RWA Statement offers assurance that the buyer has the financial resources and intent to complete the acquisition.

Issuance Procedure for RWA Statements

The process for obtaining a Ready, Willing, and Able Statement involves several steps to ensure accuracy and validity:

1. Client Request: The client submits a request to their bank or financial institution to issue the RWA Statement for a specific transaction.
2. Review of Financial Standing: The bank conducts a thorough review of the client’s financial records, ensuring the client has the required funds and financial stability to proceed with the deal.
3. Issuance of the Statement: Once the review is completed, the bank issues the RWA Statement, confirming the client’s financial capability and readiness to perform the transaction.
4. Submission to Counterparty: The RWA is then presented to the counterparties as part of the transaction documents, providing confidence in the client’s financial ability.

Documents Required for an RWA Statement

To request an RWA Statement, the following documents are typically required:

• Company Financial Statements
• Bank Statements (usually from the last six months)
• Transaction Agreement or Contract
• Trade License (if applicable)
• Passport Copy of the Main Applicant (for individuals)
• Pro-Forma Invoice (if applicable)

Advantages of Using an RWA Statement

1. Enhanced Trust: The RWA Statement strengthens trust between counterparties by providing proof of financial capability and commitment.
2. Smoother Negotiations: With the assurance provided by the RWA, negotiations can proceed more smoothly, reducing the likelihood of disputes.
3. Increased Security: It offers both buyers and sellers an added layer of security, ensuring that the party they are dealing with is financially sound and serious about the transaction.
4. Faster Deal Closure: With the backing of a bank, an RWA Statement often leads to quicker deal closures as counterparties feel reassured about the financial standing of the other party.

Issuers of Ready, Willing, and Able Statements

Several trusted banks and financial institutions issue RWA Statements. These institutions typically have a strong reputation for conducting thorough financial assessments before issuing the statements. Some common issuers include:

• BNP Paribas
• Deutsche Bank
• Citibank
• HSBC
• J.P. Morgan
• Standard Chartered Bank

Banks & Financial Institutions with SWIFT Code for LC, SBLC, BGS, POF, BCL, and RWA

We work with a network of trusted banks for your Letter of Credit (LC), Standby Letter of Credit (SBLC), Bank Guarantee (BG), and other financial instruments. Here’s a list of our partners and their SWIFT codes:

1. PG Asia Investment Bank Ltd, Malaysia (AINEMY22)
2. Dushanbe City Bank, Tajikistan (LCMDTJ22)
3. Standard Commerce Bank Ltd, USA (STDMDMDMXXX)
4. Asia Pacific Investment Bank, Malaysia (ASPMMYKL)
5. Digital Commercial Bank, USA
6. Credit Foncier IM UND Export GmbH, Germany (CFEGDE82)
7. Sapelle International Bank Liberia Limited (SIBLL) (GNERLRLM)
8. Unibanque, UK (UNBQGB22)
9. Al-Amanah Islamic Investment Bank of the Philippines (AIIPPHM1XXX)
10. Point Bank, UK (POITGB21)
11. Ace Investment Bank Limited, Malaysia (AIBMMYKL)
12. Tabarak Investment Capital Limited, UAE (TIBIAEADXXX)
13. United Bank for Investment, Iraq (UNTVIQBAXXX)
14. Golden Touch Investment Bank Limited (GTIVMT2LXXX)

Conclusion

A Ready, Willing, and Able (RWA) Statement is an essential tool in large-scale business transactions, particularly in international trade and project finance. It provides financial assurance, facilitates negotiations, and reduces the risk of non-performance. Whether you’re entering into a trade deal, a real estate transaction, or securing project finance, having an RWA Statement issued can make the process more efficient and secure.

Get Started

If you need assistance obtaining an RWA Statement or have questions about the process, [Contact Us] today. Our experts are here to guide you through the requirements and help ensure your transactions are backed by solid financial credibility.