What is a Bank Guarantee?
A bank guarantee is a guarantee from a lending institution ensuring the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank covers it. We can simply say that a bank guarantee is a promise from a bank or other lending institution that if a particular borrower defaults on a loan, the bank will cover the loss. Note that a bank guarantee is not the same as a letter of credit. We provide the bank guarantee at a fee of 1.5% the guaranteed amount as stipulated on the contract.
Types of Bank Guarantee?
A bid bond prevents companies from tendering bids and not accepting or executing the awarded contract.
A performance bond serves as collateral for the buyer’s costs incurred if services or goods are not provided as agreed in the contract.
A warranty bond serves as collateral ensuring ordered goods are delivered as agreed.
A payment guarantee assures a seller the purchase price is paid on a set date.
A credit security bond serves as collateral for repaying a loan.
A rental guarantee serves as collateral for rental agreement payments.
A confirmed payment order is an irrevocable obligation where the bank pays the beneficiary a set amount on a given date on the client’s behalf and so on...