Managing risk

Bonds, Guarantees & Standby Letters of Credit

Our trade specialists could support you in meeting trade obligations

When companies are buying and selling both domestically or internationally they may seek additional financial assurances from their customer. This can be realised through the provision of a Bond, Guarantee or Standby Letter of Credit.

Bonds, Guarantees and Standby Letters of Credit explained

Bank Guarantees (also referred to as Bonds) provide companies with additional protection in respect of their customers performance or financial obligations. We can issue Guarantees on your behalf or receive and validate Guarantees issued by other banks in your favour. 

Standby Letter of Credit is similar to a Bond or Guarantee. It is the primary guarantee instrument used in North America.

Here are the benefits

Provides security

Provides you with security that your customer can meet their financial commitments.

Safe and efficient

Provides a safe and efficient way to mobilise your commercial relationships with your trading partners.

Here are the different types

There are a wide range of different Bonds and Guarantees that can be issued depending on a customer’s specific requirements. They can be either performance related, to cover failure to perform under a contractual obligation, or they can support a financial obligation. 

Examples of Bonds and Guarantees include:

Bid or Tender Bond

Issued by the supplier in support of a contractual tender.

Performance Bond or Guarantee

Issued by the supplier in order to support their performance obligations under the commercial contract.

Advance Payment / Prepayment

Issued by the supplier when the buyer has provided a down payment for the supply of goods or services.

Payment

The supplier receives a Guarantee from the buyer to support their financial obligations under a commercial contract.

Customs Bonds / Custom Duty Deferment Guarantee / H.M. Customs & Excise Guarantee

This allows a company to defer payment of duty or tax.

Let's get started

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Thanks, now tell us what sort of customer you are

Ready to apply

If you’re a UK customer, simply click the button to start your application online. Alternatively, you can always talk to your relationship manager or give us a ring on the number below.

Application subject to customer credit line facilities. Fees and charges will apply for these services.

Contact us on: 0345 050 1422

Text Relay: 18001 0345 303 0077

Lines are open 9.00am-5.00pm, Monday to Friday (except public holidays).

Calls may be recorded and call charges from residential, business and mobiles vary, depending on your telephone operator’s tariff.

If you’re a customer registered abroad, or you’d prefer to apply offline, you can download an application form below.

Are you a new customer to the bank?

Please call our trade finance specialists who can talk you through solutions tailored specifically for you.

Contact us on: 0345 050 1422

Text Relay: 18001 0345 303 0077

Lines are open 9.00am-5.00pm, Monday to Friday (except public holidays).

Calls may be recorded and call charges from residential, business and mobiles vary, depending on your telephone operator’s tariff.

Thanks now tell us what sort of customer you are

Ready to apply

If you’re a UK customer, simply click the button to start your application online. Alternatively, you can always talk to your relationship manager or give us a ring on the number below.

Application subject to customer credit line facilities. Fees and charges will apply for these services.

Contact us on: 0345 050 1423

Text Relay: 18001 0345 303 0077

Lines are open 9.00am-5.00pm, Monday to Friday (except public holidays).

Calls may be recorded and call charges from residential, business and mobiles vary, depending on your telephone operator’s tariff.

If you’re a customer registered abroad, or you’d prefer to apply offline, you can download an application form below.

Are you a new customer to the bank?

Please call our trade finance specialists who can talk you through solutions tailored specifically for you.

Contact us on: 0345 050 1423

Text Relay: 18001 0345 303 0077

Lines are open 9.00am-5.00pm, Monday to Friday (except public holidays).

Calls may be recorded and call charges from residential, business and mobiles vary, depending on your telephone operator’s tariff.

Factsheet

Bank Guarantees (also referred to as bonds or Standby Letters of Credit) provide both buyers and sellers in a trade transaction with reassurance that either performance or financial obligations will be met. We can issue guarantees on your behalf or receive and validate guarantees issued by other banks in your favour.

Additional support for your business

Managing Risk

Help protect against the impact of exchange rate fluctuations and the risk of not being paid

MaxTrad

Our secure online platform lets you manage your international trade transactions from anywhere, 24 hours a day

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