Proof of Funds is a document demonstrating that the client has a certain financial capacity. MT799 is a simple text message, sent bank to bank. This is used for a bank to bank proof of funds, only. The MT799 is not a form of payment and it is not a bank undertaking or promise to pay. It is simply a bank to bank confirmation of the funds on deposit, nothing more.
Proof Of Funds service is not a loan, but is a perfect, inexpensive and fast way to add strength to your current financial profile, show reserves or buy time in your transactions.
Common Swift Terminology is MT799
Different formats may include bank letters, phone/fax verification, online account access, verification of deposit form (VOD), bank to bank Swift, Certificates of Deposit (CD’s) and/or account statements.
MT799 is a free format SWIFT message type in which a banking institution confirms that funds are in place to cover a potential trade. This can, on occasion, be used as an irrevocable undertaking, depending on the language used in the MT799, but is not a promise to pay or any form of bank guarantee in its standard format. The function of the MT799 is simply to assure the seller that the buyer does have the necessary funds to complete the trade.
In some cases MT799 is usually issued before or after a contract is signed, and before a letter of credit or bank guarantee is issued. After the MT799 has been received by the seller’s bank, it is then normally the responsibility of the seller’s bank to send a proof of product (POP) to the buyer’s bank, at which point the trade continues towards commencement.
The actual payment method commonly used is a documentary letter of credit, which the seller presents to the issuing or confirming bank along with shipping documents. Once the bank confirms the documents, the seller is then paid. An alternative method is to use a bank guarantee in place of a letter of credit. It is normally at the seller’s discretion which method of payment is used.
We Can Issue A MT799 POF
The truth still remain that some banks don’t accept to have an MT799 POF issued to seller’s bank when their clients approach them. Some banks are reluctant to issue MT799, as these make them liable for the full cost of the trade, which can sometimes be in the millions. A bank will normally not issue an MT799 without some form of collateral to secure their own interests. MT799 POF is a key instrument used to convince a supplier that buyer actually have funds on deposit.
How MT799 Issued
MT799 is an automated message sent electronically from one bank to another. The paperwork associated with an MT799 will vary from bank to bank, though most banks follow a similar format.