Letter of Credit Replacement Program ®

The Imperial A.I. Credit Companies have developed a Letter of Credit Replacement Program to help increase a company’s borrowing power by reducing or eliminating letters of credit posted to support large liability insurance programs.  Our Letter Of Credit Replacement Program enables the insured to satisfy an insurance carrier’s security requirements by converting letters of credit into cash via a loan. 

The loan proceeds are advanced by an Imperial A.I. Credit Company and placed in a trust account (or similar structure) of which the insured is a beneficiary.  Advantages of this program include enhanced borrowing capacity, additional working capital, and relief from continuously expanding letter of credit requirements as shown in this example:

Typical Standard LOC

$2 million Letter of Credit

  Four year cost                      =           $100,000

$2 million loan/trust account alternative program

            Four year cost                      =            $203,000

            Trust earnings                      =            $393,000

            Net benefit                            =            $190,000

The foregoing example is not necessarily representative of the actual cost or earnings and appears for illustrative purposes only.  For more information, click here.