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Thursday, March 14, 2013

4 types of Proof of Funds and their uses

There are 4 types of POFs, plus BG/SBLC (see below) and SWIFT

1. Brokerage Accounts
2. Escrow Accounts
3. Attorney Escrow Accounts
4. Bank Accounts (on a case by case basis/US banks only)

Sample Quote Shown Below From 9/16/13

Note: There will be a letter issued by a licensed and insured title and escrow company stating that an account has been established in the client's name and the dollar amount.

Brokerage account POFs from $5M to $2.5B
Escrow account POFs from $100K to $30M
Attorney escrow accounts POFs from $100K to $1M
Bank account POFs from $300K to $1M.

For brokerage accounts and bank accounts, they are account statements or verification letters. Depending on the transaction, for brokerage accounts, the SBLC verbiage can also accompany the account.

For the attorney and escrow accounts, an escrow confirmation letter or attorney letter will be issued confirming the balance.

Larry @

A proof of funds is a document that indicates that a person has the ability and funds available to use for a transaction of some sort. Normally, it comes in the form of a bank, security or custody statement. The purpose of the POF is to ensure that the funds required for a transaction are obtainable and legitimate.

What banks can be dealt with? Any bank, but in most cases, it is the most convenient bank to the transaction.

Accounts will be established in the client’s name and can be verified. Accounts can only be verified via SWIFT if there is collateral for the funds.

Note: There is never an obligation to continue beyond a one month period.

For brokerage accounts, a brokerage account will be opened in the name of whoever would be necessary for you.  The account can be verified via email, phone, online and online via access code.  The client will also have online access to their account.

For escrow accounts, an escrow account will be established at a licensed title & escrow company in your name or your client's name for a small fee.  The account can be verified via phone, fax, email, etc. The letter issued by the title company will state that they confirm that an escrow account has been established on a certain date for a certain dollar amount and will give the escrow account number.  It will also state that the information can be verified via phone, email, etc. 

Brokerage accounts can be in Euro or USD and will be much cheaper. Escrow accounts have to be in USD.

For bank POFs in the client's name, the client will need to provide collateral. When they provide the collateral, there are no restrictions on the funds. Pretty much any kind of collateral would be acceptable. It would be much easier for them to present collateral and we can let them know if it is acceptable or not. Any asset that can be liquidated or sold on an open market will suffice. As an example, depending on the asset, you would need between $10.5M and $20M in assets for a $10M loan.

The only other option would be a bank account POF in the name of the lender.  The lender would first have to approve the use of the account.

A Proof of funds is not a loan, rather an inexpensive and efficient way to affix a strong partner to your current financial profile and buy time during transactions. Sometimes referred to as ’leased funds’ or a ‘cash collateral’ account, Proof of funds are real accounts with actual debt-secured, cash-backed deposits.

Pricing can be effected by:
  • Issuing bank
  • Verbiage
  • Term of SBLC/BG/LG
  • Face value
  • Use of SBLC/BG/LG
Sample Quote (9/16/13): For one client, the cheapest route was the brokerage account for a $13M POF  at

- 0.860% per 30 days 
- 1.520% if the 60 days is paid in the first payment

To obtain a quote, the provider needs to know the amount required, USD or Euros and how long needed.

Proof of Funds Have Been Successfully Used For:

*Gold, Petroleum, Commodities Transactions
*Private Investment Opportunities
*Leverage Funding for Commercial Real Estate
*Balance Sheet Enhancement
*Demonstrate Proof of Funds

SWIFTS - As you know, they are electronic notices sent from one bank to another. 

The MT799/MT999/MT199 Swift's are FREE FORMAT MESSAGES useful for Proof of Funds 

The MT760 Swift is a guarantee of value

A MT103 is a bank wire. 

We typically have capability to send SWIFT MT799, MT99, MT199 and MT760 on cash and SBLC/BG's.

All accounts are issued in your name and can also include 3rd party beneficiary information as well.

Note: Can issue instruments from HSBC or Barclays UK. Yes, we can issue RWA pre advice before the instrument is sent out. 

SBLC/BG for LENDING: 5M - 100M+ 


Larry @

Note: Anybody looking to exchange currency can go directly to the FOREX market.

Thought: Understand that your insecurities are gifts to be unwrapped for personal growth and maturity.