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.
Bonds, Guarantees & Standby Letters of Credit
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.
A Standby Letter of Credit is similar to a Bond or Guarantee. It is the primary guarantee instrument used in North America.
Provides you with security that your customer can meet their financial commitments.
Provides a safe and efficient way to mobilise your commercial relationships with your trading partners.
Here are the different types of Bonds and Guarantees
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.
- Customs Bonds / Custom Duty Deferment Guarantee / H.M. Customs & Excise Guarantee - allows a company to defer payment of duty or tax.
- Payment – the supplier receives a Guarantee from the buyer to support their financial obligations under a commercial contract.
How do I apply to issue a Bond, Guarantee or Standby Letter of Credit?
Existing customers can download an application form:-
- Bonds and guarantees application form (PDF, 150KB)
- Standby letters of credit application form (PDF, 221KB)
Application subject to customer credit line facilities. Fees and charges will apply for these services.
Additionally we offer a more comprehensive online digital service which allows you to initiate, manage and control your transactions. For more details see the MaxTrad link below.
Get in touch
To discuss your unique banking needs, please call our dedicated trade specialists on:
0800 210 0235
18001 0800 210 0235
Mon to Fri 9am-5pm (excl. public holidays)
Calls may be recorded.