Introduction
A Bank Guarantee (BG) is a document whereby the Bank as guarantor undertakes to pay an agreed sum if customer fails or defaults in fulfilling their obligations under the terms and conditions of the guarantee.
There are various types of Bank Guarantee to facilitate your business needs:
Bid / Tender Bond - covers risk of seller/bidder withdrawing bid, failing to sign contract if awarded/failing to provide performance bond.
Performance / Advance Payment Bond - covers risk of seller/contractor failling to perform contractual obligations / supplying faulty or inferior goods.
Retention Bond - covers risk of seller failing to perform post completion obligations.
Warranty Bond - covers risk of seller failing to maintain equipment.
Customs Bond - is issued in favour of the Custom authority and covers the risk of non-payment of customs duties like good-in-transit & deferment of payment of customs duties.
Standby Letter of Credit (SBLC) - SBLC is an alternative solution for Financial Guarantee purposes.
Shipping Guarantee - is an indemnity that will allow a shipping company to release your goods without requiring you to present the original Bill of Lading.
Features and Benefits
- Performance Bond is giving assurance to project awarder on completion of project by the contractor.
- Standby LC can be used to secure a financial facilities for a business and to facilitate the capital flow of international trade.
- Shipping Guarantee, client can reduce the amount to spend on storage and demurrage port charges.
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