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Managing Risk

Bonds & Bank Guarantees

What are Bonds & Bank Guarantees?

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.

Benefits of Bonds and Bank Guarantees...

Provides security

Gives your supplier confidence that you can meet your financial commitments

Safe and efficient

Provides a safe and efficient way of mobilising the working relationship between overseas trading partners.

Payment protection

Gives you protection against non-payment risk

Pick the right type of Guarantee for you

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.

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.

Performance

The most popular type of bond. Issued by the supplier in order to support their performance obligations under the commercial contract.

Bid or tender bond

These are typically used during the bid or tender stage of a construction or procurement contract. Issued by the supplier in support of a contractual tender.

Advance Payment

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.

Warranty

Used to Guarantee the quality and on-going performance of goods supplied, or works undertaken, for a set period.

Trade & travel (IATA & ABTA / CAA)

In order that airlines and other travel services providers can obtain an operating license they must evidence that they have adequate financial resources.

Ready to apply

Great, thanks for choosing Bonds and Bank Guarantees. If your Relationship Manager has confirmed you have a credit line in place to support this facility, apply online with our simple application form below.

Alternatively you can always talk to your relationship manager. If you’re a new customer with an annual turnover of less than £2 million, you can give us a call on 0345 050 1422. If it’s over £2 million, call us on 0345 050 1423.

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.

Dealing with the US?

A Standby Letter of Credit is similar to a Bond and Bank Guarantee, and is the primary guarantee instrument used in North America.

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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