Who can purchase a bank guarantee

We are a family owned and operated business.

Any natural or legal person with a primary bank account can apply for a Bank Guarantee to be issued. As long as they maintain adequate assets in their account, there should be no reason why the Bank should reject a request to issue a Bank Guarantee for good faith business purposes.

We are a family owned and operated business.

The account holder will simply ask his bank to issue a Guarantee and provide the reasons for issuing it. The bank would have a simple application form for this service. The account holder will submit the application to the bank containing the details of the underlying commitment to be entered into, providing the bank with information such as; (A) how long the Guarantee should be for, (b) any payment conditions, (c) the amount and currency and, of course, (d) details of the Beneficiary and its bank details, etc.

We are a family owned and operated business.

The Bank, in turn, will request that the account holder enter into some type of pledge agreement with them. This means that before the bank agrees to issue a Guarantee, the Bank will require a lien or pledge on the account holder's assets to guarantee the Guarantee. The acceptable assets for a bank to issue a Guarantee are generally liquid assets, such as bank cash, stocks and shares and bonds. In other words, assets that can be liquidated instantly. It is becoming less and less common for banks to accept less liquid assets, such as real estate, although the decision to accept the asset is ultimately the bank's.

We are a family owned and operated business.

In essence and for example, if an account holder wanted to issue a third party with a Bank Guarantee for $ 50 million, it would be necessary to pledge money, stocks or bonds to his bank for a minimum of that amount. It is highly unlikely that a bank would agree to issue a Guarantee on behalf of the account holder without having assets of equal or greater value. It is for "amount received".

We are a family owned and operated business.

Once the bank has charged, arrested or blocked the assets in the bank account of the account holder at the bank, the same bank will issue a Guarantee in accordance with the specifications of its account holders.

The Issuing Bank will initially send the Bank Guarantee to the Beneficiary Bank by SWIFT. See SWIFT

The Bank can usually pre-advise the Beneficiary Bank by sending a SWIFT MT799 which is just a notice describing the Issuing Banks' instructions to remit a Guarantee or to verify information in advance of the issue.

We are a family owned and operated business.

The Issuing Bank will also send the Bank Guarantee via SWIFT MT760. See MT799 and MT760.

Most banks will also send an original paper copy (which will look like a letter) by post to the Beneficiary Bank. It is courteous for the Beneficiary Bank to send a message or letter back to the Issuing Bank confirming its receipt and security acknowledgment.