Learn about bank Guarantee in Singapore with examples
Imagine you have a garment company in Singapore. If your company does frequent transaction, then you can take help from your bank by using bank guarantee service.
In today’s article, we will talk about bank guarantees and its benefits with examples. Let’s start it.
Definition of Bank Guarantee
You may know that Bank Guarantee is an agreement between three parties (the bank, applicant, and beneficiary).
Applicant is the party who look for the bank guarantee from the bank and the beneficiary is the one to who receive the guarantee.
Types of Bank Guarantee
There are many types of a bank guarantees. Such as Financial Guarantee, Performance Guarantee, Advance Payment Guarantee, Loan Guarantee, and Bid Bond Guarantee.
Example
Suppose company ABC is a small, almost unfamiliar garment company that would like to purchase huge material. The manufacturer dealer may demand Party ABC to prepare a bank guarantee in order to feel more confident that it will make cash for the goods it exports to Company ABC.
To secure this bank guarantee, Company ABC calls one from its approved bank. The banker gives the guarantee in paper, which is again given on to Company ABC and its dealer. Company ABC’s lender necessarily becomes a co-signer on the purchase contract with the vendor.
Benefits of Bank Guarantee
A bank guarantee provides as an agreement from a commercial bank that it will consider legal responsibility for a specific debtor if it does not satisfy its contractual obligation. Most bank guarantees carry a fee equal to a small percentage amount of the full contract.
In the process of external businesses or transactions with Government bodies, the external party or a Government Undertaking is constrained and cannot fix the integrity of each and every candidate to a project. In such situations, Bank Guarantees carry out as an established instrument to impose balance and creditworthiness of firms applying for projects.
When a candidate approaches the bank, seeking for a bank guarantee, the bank makes an assessment of the candidate’s creditworthiness. Here, as a candidate, you don’t have to submit other papers. An agreement is sufficient for handling cash.
Here you can contact
Do you want to enhance your business? Then make contact ‘OXFORD Investment Bank Group - Bangkok, Thailand’, a renowned company regarding bank guarantees in Singapore. Here, you will be offered exciting services such as Letter of credit, documentary collection, performance guarantee, and proof of fund documents. So, don’t waste your time, simply click on it - oxfordinvestbank.com and learn more about them. You can read other articles, blogs, and reviews for better knowledge.
In today’s article, we will talk about bank guarantees and its benefits with examples. Let’s start it.
Definition of Bank Guarantee
You may know that Bank Guarantee is an agreement between three parties (the bank, applicant, and beneficiary).
Applicant is the party who look for the bank guarantee from the bank and the beneficiary is the one to who receive the guarantee.
Types of Bank Guarantee
There are many types of a bank guarantees. Such as Financial Guarantee, Performance Guarantee, Advance Payment Guarantee, Loan Guarantee, and Bid Bond Guarantee.
Example
Suppose company ABC is a small, almost unfamiliar garment company that would like to purchase huge material. The manufacturer dealer may demand Party ABC to prepare a bank guarantee in order to feel more confident that it will make cash for the goods it exports to Company ABC.
To secure this bank guarantee, Company ABC calls one from its approved bank. The banker gives the guarantee in paper, which is again given on to Company ABC and its dealer. Company ABC’s lender necessarily becomes a co-signer on the purchase contract with the vendor.
A bank guarantee provides as an agreement from a commercial bank that it will consider legal responsibility for a specific debtor if it does not satisfy its contractual obligation. Most bank guarantees carry a fee equal to a small percentage amount of the full contract.
In the process of external businesses or transactions with Government bodies, the external party or a Government Undertaking is constrained and cannot fix the integrity of each and every candidate to a project. In such situations, Bank Guarantees carry out as an established instrument to impose balance and creditworthiness of firms applying for projects.
When a candidate approaches the bank, seeking for a bank guarantee, the bank makes an assessment of the candidate’s creditworthiness. Here, as a candidate, you don’t have to submit other papers. An agreement is sufficient for handling cash.
Here you can contact
Do you want to enhance your business? Then make contact ‘OXFORD Investment Bank Group - Bangkok, Thailand’, a renowned company regarding bank guarantees in Singapore. Here, you will be offered exciting services such as Letter of credit, documentary collection, performance guarantee, and proof of fund documents. So, don’t waste your time, simply click on it - oxfordinvestbank.com and learn more about them. You can read other articles, blogs, and reviews for better knowledge.
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