I am just wondering. When someone says, "We can loan SBLC's, BG's, and CD's to your company with full funds history, etc" Is it even legal to "loan" an instrument like that?

It depends in what context its used. If your talking about "leased" instruments from internet providers the reality is that the party's will hardly, if ever perform. Loaned or leased instruments are not made to be loaned against as collateral; excluding some very special joint venture agreements that you will not find on the internet.

The whole concept of loaned instruments originated from larger hedge and investment funds. Everyday Prime Brokers will "lease" instruments to help the funds avoid margin calls, type in Security Lending in Google and a few will pop up.

This provider actually uses the term "loan not lease" specifically. I guess I was with the assumption that SBLC's were specifically assigned when issued and weren't really transfereable. hmmm needless to say I probably won't get involved just wondering why anyone would claim to be able to do this type of thing.

In theory its possible but unlikely. If a provider leased a full functional SBLC they would have to have 100% cash backing the instrument, why would a provider lease a third party a SBLC with there assets backing the instrument for a fee if the third party could default? They would risk loosing all there assets at that time; doesn't make much sense. What you might here is that they are able to pick up the SBLC at large discounts, however thats just not true. Possibly in the case of BG's, but not SBLC's.

Generally speaking SBLC's are sent through a MT 760 so a provider can name the "owner" of the MT 760 and the beneficary (new lender), which is not dependent on previous owned SBLC's. Assigning a SBLC or transferring it is really an oxymoron in that sense, just smoke a mirrors by the providers.