Bonds and Guarantees
Overlay
Managing risk
Bonds, Guarantees & Standby Letters of Credit
Security may be required. Product fees may apply. Over 18s only. Subject to status, business use only. Any property or asset used as security may be repossessed or forfeited if you do not keep up repayments on any debt secured on it.
What are bonds & guarantees, and standby letters of credit?
Bonds & guarantees, and standby letters of credit, provide companies with additional protection in respect of their business or customers, performance or financial obligations. We can issue guarantees on your behalf or receive and validate guarantees issued by other banks in your favour.
What's right for you?
The terms of your contract will determine whether you need a guarantee or a standby letter of credit. Read the below to ensure you know which product is best for your business
Bonds & Guarantees
- Provides a purchaser the security of a guarantee if there is a failure by the seller to meet its contractual obligation.
Standby Letters of Credit
- To pay a beneficiary based either on their written demand certifying non-fulfilment of contracted terms or against stipulated documents.
- Operates similar to a Bank financial guarantee, with the main difference being that it is governed by the current version of UCP or ISP98
Benefits of Bonds and Bank Guarantees...
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.
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.
Customers with hearing and speech impairments can contact us by using our Relay UK Service: 18001 0345 050 1422 if your annual turnover is less than £2 million or 18001 0345 050 1423 if your annual turnover is more than £2 million.
For more information on accessibility visit: https://www.business.rbs.co.uk/business/accessibility.html
Calls may be recorded for training and monitoring purposes.
To see how much your call might cost, visit the call charge information page.
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.
Provide a secure method of settlement and reduce the risk of non- payment for delivered goods. Once issued they are legally binding, irrevocable and cannot be cancelled unless all parties agree.
Documentary collections provide a secure way to make and receive payments during international trade.
Trade Loans tailor loans to a specific contract(s) and cover the funding gap between you paying your suppliers and being paid by your customer. They allow you to repay the loan when your customer pays you and are available to businesses with a turnover of over £2m.
To compare all of our Trade Finance products, see our Trade Finance Homepage
Managing Risk
Help protect against the impact of exchange rate fluctuations and the risk of not being paid
MaxTrad
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