(323) 522-5433Proof of Funds Program Procedures
Procedures vary according to the product request.
In general an application is made for a specific credit enhancement product. The application has documentation that is required to send back with the application such as proof of identification for the client, corporation, and proof of fee capability.
The provider then issues a contract detailing the terms and conditions and escrow instructions.
No credit checks are run or financials checked save proof of funds for the fee. After the terms and contract has been signed by all parties it is required the client put up the arrangement fee into escrow. The client is required to use the provider's escrow service company in most cases. Leniency was given in the past but this was abused and now the provider's escrow or attorney trust account is often mandated.
The provider generally takes anywhere from 2 to 5 business days to set up the account and provide the proof of funds account depending on the product. A Sub Account and Master Account POF service takes only 2 to 3 days; Soft Escrow accounts take 2 to 3 days; where Hard Escrow take 3 to 7 business days; SWIFT Cash Collateral Accounts along with the MT760 SBLC accounts take 2 to 3 days in many instances, but up to 10 business days for the Euro Cash Collateral Accounts; SBLC, BG, and CD instsruments are case by case and take up to 30 days depending upon the situation and provider.
Once the account is set up and the service provided the client and/or the receiving bank may verify and authenticate the account or instrument according to the lending agreement, service agreement, and/or escrow instructions. Usually within 24 hours upon receipt of the service or instrument (according to escrow instructions and service agreement), funds are released from escrow.
Renewals of 30-60 days, or 1 year as agreed are often available at discount.