PROOF OF FUNDS

WE ARE SUPPORTS CLIENTS TO FINANCE INTERNATIONAL TRADE TRANSACTIONS

A Proof of Funds, also known as a POF, serves to verify that the investor does in actual fact have the necessary capital for a particular investment. The intention behind this - for example with respect to large projects - is to guarantee that only those who would ultimately be in a position to realise such a project submit offers. The purpose of the proof is to ensure that the financial resources required for a transaction are available and also lawful.
A POF verifies that an investor in fact does have the investment amount or the necessary capitals. It happens more often that someone submits a project offer but if selected, they will not have the capital to realize the project. The POF makes sure that only those submit offers who can realize the project because they have the required capital. POF is especially important when we talk about large projects.

PROOF OF FUNDS LETTER TEMPLATE (pdf)

TYPES OF PROOF OF FUNDS LETTERS

BANK COMFORT LETTER

These types of letters can be referred to differently depending on their financial purpose. A Comfort Letter can be given by an accounting firm which would verify that an organization has enough finances or funding. This is typically used when a public offering is made initially. When it comes to proof of funds letters, a Bank Comfort Letter is created to serve as a written documentation for a buyer, which is to be given to a seller as proof that the buyer is willing and capable of making the payment.

BANK READINESS LETTER

This type is commonly used for international trading. When international export or import financing is involved, there would usually come a time when a buyer or a seller would be asked for a bank letter of readiness. This type of letter can be issued bank to bank. The purpose of this letter is to give confirmation to the other bank that they are well equipped and are ready to continue with the transaction. This type of letter is an essential element in ensuring that a transaction is completed properly.

BLOCKED FUNDS LETTER

This type of letter is most commonly used to serve as proof that the funds in a specific account are reserved or blocked for a specific transaction. These types of letters are customarily used to bank debenture buy or sell deals and other high-end financial transactions. Once this letter is issued, a specific amount of funds in an account must not be used or depleted and should stay in the account until they need to be used for the agreed upon transaction. Blocking funds can be done by giving a letter to your bank, making the request and the bank would then have to block the account on their system.

VERIFICATION OF DEPOSIT LETTER

When real estate purchases are involved in transactions, whether big or small, a verification of deposit letter is usually issued to show that the bank is capable of funding. This kind of document is usually pre-formatted by different banks so that the all the details of the account holder is already included. The document can also contain any comments or instructions from the banker. As you can see, there are different types of proof of funds letters, depending on the circumstances for which they will be used.