Let us make you (and your business partners) feel secure
For companies faced with many cross-border transactions, securing payment is often the top concern. Wherever you import from, we can support you by providing the necessary guarantee to your supplier, so that distance does not impair your sales position or your business. We can also provide backup to exporters by checking the terms of the guarantee they receive and those to be issued.
Bank guarantees are traditionally used in foreign trade to facilitate transactions between distant parties, with the bank committing to pay a given amount should its customer fail to honour its commitments. They can also be used to guarantee the successful outcome of a tender.
Bank guarantees do not involve disbursements on your part and offer you terms which you could not obtain acting alone. They are less expensive than credits.
They come in many different forms, according to the type of commitment required.
Bid guarantee
A bid guarantee will be requested from a company which puts in a tender for a contract. The guarantor bank undertakes to pay to the beneficiary, on request, all or part of the amount of the guarantee if the tendered withdraws its offer. Or if, having secured the contract, it refuses or proves unable to sign the contract or issue the guarantees stipulated in the specifications.
Performance guarantee
This is a guarantee from the bank that it will make good any damage incurred by the buyer as a result of poor or incomplete execution of the contract. The buyer's sole alternative in such cases is to have the work completed or put right by another company, resulting in an increase in cost over the original contract. It is this risk which is covered by the performance guarantee, usually issued for the equivalent of 5 to 10 % of the value of the contract. The guarantee is partially released on temporary acceptance of the work and completely released after final acceptance.
Advance payment guarantee
In issuing an advance payment guarantee, the guarantor bank undertakes to refund any advance payments made by the buyer if the promised supplies are not delivered or if the work described in the contract is not done. This guarantee can sometimes be reduced as deliveries occur or as work progresses.