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Who needs a bank guarantee?
Anyone who wishes to have security for payment of exported goods, or to ensure that payment is received if a foreign supplier does not fulfil its commitments within the stipulated period. |
Overview
A bank guarantee is the best option if you want to ensure that you receive payment, or that ordered goods are actually delivered. A bank guarantee represents extra security for customers who do international business.
A bank guarantee is also known as a Letter of Guarantee or Bond.
When are bank guarantees used in international transactions?
Bank guarantees can be used in many different areas of international business.
Common areas of use include:
- secure payment for goods or services
- when a tender is to be fulfilled
- for secure repayment of advances
- when a contract is to be fulfilled
- when guarantee times for work or deliveries are to be fulfilled
- for renting premises
- as collateral for a loan
A bank guarantee is a wise choice if:
- the parties need passive security which will only be activated in the event of a breach of contract
- the agreement stipulates regular deliveries over a long period
- the parties wish the transaction to be subject to standard international regulations
- the parties require flexible security
Read more about how a bank guarantee works
You are welcome to contact your local branch or one of our Trade Finance departments in Stockholm, Gothenburg or Malmö, so that we can tell you more about what we can do for your company.
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