Bank Guarantees are the financial instrument issued by a bank on behalf of its client to assure the successful completion of the commitment made by the clients for their trade transaction.
By issuing Bank Guarantee on behalf of its client, the bank gives payment assurance to the buyer and the seller. This guarantee assures that in case, if the buyer was unable to make the payment due to bankruptcy, solvency or defaults, then the bank will be liable for payment of a sum of money. This gives extra assurance to the importers and exporters to conclude their trade transactions.
Benefits of Bank Guarantee for Imports and Exports
- Exporter gain peace of mind by knowing they will receive the payment on time.
- Importer gains the ability to negotiate their favorable terms.
- Helps the small business owners to conclude more trade deals, i.e. not possible without BG.
- Gives importers the credit status to trade anywhere in the world.
- Eliminates payment risk for both importers and exporters.
- Improves creditworthiness of importers/exporters, as BG is backed by a bank.
Anyone can avail Bank Guarantee MT760 from their banks. However, to avail MT760 from your own account, you need to oblige with certain criteria defined by banking terms. First of all, to avail guarantees from your bank account, you need to maintain a certain marginal amount in your account. And the second, you should have a good credit score & worthy financial background. Only if you comply with all these criteria, then only, the bank will provide a payment undertake on behalf of your company and in favor of your counterparties.
In case of the failure to oblige with the banking norms, the bank will decline your request. Here comes the importance of contacting trade finance providers like us.
If you’re looking to avail Bank Guarantee for your upcoming trade deal and facing lack of cash funds to provide as cash margin, contact us today. Being Bank Guarantee Providers, we can assist their traders by providing Bank Guarantee without availing any cash funds or collaterals.
Avail Bank Guarantee from International Bank Guarantee Providers and avail lucrative contracts without blocking your working capital!
