What is Bank Guarantee?

18 May What is Bank Guarantee?

Bank Guarantee is a kind of guarantee from a financing organization. The bank guarantee signifies a lending institution ensures that the liabilities of a debtor is going to be met. In other words, if the debtor is unsuccessful to settle a debt, the bank will cover it. A bank guarantee allows the customer, or debtor, to acquire goods, purchase equipment or draw down a loan. 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.

what is bank guarantee?

Bank Guarantee vs. Letter of Credit:
It is important to note that a bank guarantee is not the same as a letter of credit, although with both instruments the issuing bank accepts a customer’s liability if the customer defaults. With a guarantee, the seller’s claim goes first to the buyer, and if the buyer defaults, then the claim goes to the bank. With letters of credit, the seller’s claim goes first to the bank, not the buyer. Although the seller will likely get paid in both cases, letters of credit offer more assurance to sellers than guarantees generally do.

Examples of Bank Guarantees

There are many different kinds of Bank Guarantee namely:

• A Payment Guarantee assures a seller the purchase price is paid on a set date.
• An Advance Payment Guarantee acts as collateral for reimbursing advance payment from the buyer if the seller does not supply the specified goods per the 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 credit security bond serves as collateral for repaying a loan.

For example, St. Marys hospital is a new hospital that wants to buy $1 million in medical equipment. The equipment vendor requires St. Marys hospital to provide a bank guarantee to cover payments before they ship the equipment to St. Marys hospital. St. Marys hospital requests a guarantee from the lending institution such as GRAND CITY INVESTMENT LIMITED (  https://grandcityinvestment.com  ) keeping its cash accounts. GRAND CITY INVESTMENT LIMITED essentially cosigns the purchase contract with the vendor.

HOW TO GET A BANK GUARANTEE:
GRAND CITY INVESTMENT LIMITED is a provider of leased bank guarantee at 4% leasing fee per year. We are also direct providers of business loans, international project funding, Standby Letter of Credit (SBLC), Letter of Credit (LC/DLC), BG, SBLC, Lease BG etc.

All our bank instruments are issued from prime banks such as HSBC Hong Kong, Barclays Bank London, Standard Chattered Bank or any AAA rated bank of your choice.

lease bg, lease bg providers, lease bg provider, top bg Providers, genuine bg provider, international bank guarantee providers

Our bank instruments are cash backed and can be used for Discounting, Monetization and Private Placement Programs (PPP). They also can be used as collateral against a loan or credit line to secure Funding for Projects.

Bank Instrument Description:
1. Bank Instrument Type: Cash Backed Bank Guarantee {BG}
2. Face Value: USD 1 Million (Minimum) to USD 5 Billion (Maximum)
3. Issuing Bank: Barclays Bank London, HSBC Hong Kong, Citibank New York, Deutsch Bank Germany or any prime bank.
4. Age: One Year and One Day (with rolls and extensions where applicable)
5. Leasing Price: 4% of Face Value plus 2% brokers commission (Applicable only if there are brokers in the transaction)
6. Delivery: SWIFT MT-760
7. Payment: MT103 Swift Wire Transfer
8. Hard Copy: Bank Bonded Courier within 7 banking days.