{"id":322,"date":"2020-05-31T12:54:24","date_gmt":"2020-05-31T12:54:24","guid":{"rendered":"https:\/\/exetergroupofcompanies.com\/?page_id=322"},"modified":"2025-01-10T10:34:46","modified_gmt":"2025-01-10T10:34:46","slug":"bank-guarantee-letter","status":"publish","type":"page","link":"https:\/\/exetergroupofcompanies.com\/zh\/services\/bank-guarantee-letter\/","title":{"rendered":"BANK GUARANTEE LETTER"},"content":{"rendered":"
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READY TO GET STARTED NOW?
\nSimply fill out an application and We will get started on financing your deal.<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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WHAT IS A BANK GUARANTEE? (BG)<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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A\u00a0Bank Guarantee (BG)<\/strong>\u00a0is very similar to a\u00a0Letter Of Credit (LC)\u00a0<\/strong>as they both are used for many types of business transactions (financial\u00a0or performance based).<\/p>

The real difference between the two is that a\u00a0Letter Of Credit (LC)\u00a0<\/strong>ensures that a business transaction goes as planned, whereas a Bank Guarantee (BG) reduces losses if a business transaction doesn\u2019t go as planned.<\/p>

A Bank Guarantee (BG) guarantees a certain sum to the beneficiary if the opposing party doesn\u2019t fulfill its specific obligations under their agreed upon contract.<\/p>

Bank Guarantees (BG)<\/strong>\u00a0ensure both sides in a contractual agreement from credit risk. \u00a0<\/p><\/div><\/div><\/div><\/div>

A construction company and its steel beam supplier may enter into a contractual agreement to build a new complex.<\/p>

Both sides might have to issue\u00a0Bank Guarantees (BG)<\/strong>\u00a0in order to prove their credit-worthiness to each other. \u00a0<\/p>

In a case that the steel beam supplier fails to deliver steel beams to the job site per their agreed contractual agreement, the construction company would notify the issuing bank of the breach of terms agreed up in the Bank Guarantee (BG) and the bank would then pay the construction company the amount agreed upon in the\u00a0Bank Guarantee (BG).<\/strong><\/p><\/div><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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HOW DOES THE BANK GUARANTEE (BG) \nPROCESS WORK?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The parties involved in issuing a\u00a0Letter of Credit (LC)are the seller\/exporter (beneficiary), the issuing bank or financial institution, the buyer\/importer (applicant) who is also the bank\u2019s or financial institution\u2019s client, and usually\u00a0an advising bank\u00a0of whom the seller\/exporter (beneficiary) is a client.<\/span><\/p>

A\u00a0Letter of Credit (LC)\u00a0requires that the seller\/exporter (beneficiary) present certain documents before the letter of credit\u2019s expiration.<\/span><\/p>

These specific documents are directly\u00a0related to the contract between the seller\/exporter (beneficiary) and the buyer\/importer (applicant), as they show\u00a0the issuer that the seller\/exporter (beneficiary)\u00a0has completely fulfilled his\/her side of the deal.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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a) Finalize the draft between you and your beneficiary and sign\u00a0off on the draft (changes are free of cost).<\/span>\u00a0<\/p>

b) We issue you a payment invoice for the BG, which you arrange to pay.<\/span><\/p>

c) Once we receive your wire payment, we will release the finalized\u00a0<\/span>Bank Guarantee (BG)<\/span>\u00a0to the bank for issuance and delivery.<\/span><\/p>

Step 4:\u00a0Issuance\u00a0<\/span><\/p>

More often than not, the bank will issue the\u00a0Bank Guarantee (BG)\u00a0within 48 hours of release.<\/span><\/p>

Once issued, a copy of the\u00a0BG will be emailed to you as it is transmitted by\u00a0a MT760\u00a0SWIFT message to the beneficiary, including the reference number of the BG.<\/span><\/p>

Your seller\u2019s bank will be able to receive and confirm the Bank Guarantee (BG) transmission soon thereafter.<\/span><\/p><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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WHAT ARE TYPES OF BANK GUARANTEES? (BG)<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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1)\u00a0Bid Bond Guarantee:<\/strong>\u00a0<\/strong><\/p>

Is issued as part of the bidding process between a contractor and the project owner, in order to guarantee that the winning bidder will undertake the contract under the term\u00a0sand\u00a0conditions that they bid.<\/p>

2)\u00a0Performance Bond Guarantee:<\/strong>\u00a0<\/p>

A surety bond usually issued by a bank to guarantee the satisfactory completion of a project by a contractor.\u00a0\u00a0<\/p>

Also known as a contract bond.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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3)\u00a0Advance Payment Guarantee:<\/strong>\u00a0<\/strong><\/p><\/div><\/div><\/div><\/div>

Is utilized whenever a contract includes advance payment to be made to the seller.<\/p>

It guarantees\u00a0that this advance payment will be returned to the buyer if the seller happens to not fulfill\u00a0its obligation to the seller.<\/p>

4)\u00a0Warranty Bond Guarantee:<\/strong><\/p>

A type of security bond that states that the contractor has a history of trustworthiness. \u00a0<\/p>

It also protects the client should the work completed be subpar or unethical in any way.<\/p>

5)\u00a0Payment Guarantee:<\/strong>\u00a0<\/strong><\/p>

A financial commitment that requires a debtor to make a repayment due to terms outlined in the debt agreement.<\/p>

6)\u00a0Rental Guarantee:<\/strong>\u00a0<\/strong><\/p>

A type of insurance used to protect landlords against loss of rent.<\/p>

7)\u00a0Letter of Indemnity:<\/strong>\u00a0<\/strong><\/p>

A letter that guarantees certain contractual provisions will be met\u00a0or financial\u00a0reparations will be made. \u00a0<\/p>

Guarantees that losses will not be suffered\u00a0if the contractual provisions aren\u2019t met.<\/p>

8)\u00a0Confirmed Payment Order Guarantee:<\/strong>\u00a0<\/strong><\/p>

A guarantee of payment on a certain due date on top of the letter of credit issuing bank\u2019s own commitment to pay the supplier.<\/p><\/div><\/div><\/div><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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\n\t\t\t\t\t\n\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\tEnquire <\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"

READY TO GET STARTED NOW? Simply fill out an application and We will get started on financing your deal. Apply Here WHAT IS A BANK GUARANTEE? (BG) A\u00a0Bank Guarantee (BG)\u00a0is very similar to a\u00a0Letter Of Credit (LC)\u00a0as they both are used for many types of business transactions (financial\u00a0or performance based). The real difference between the […]<\/p>\n","protected":false},"author":6,"featured_media":0,"parent":53,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"elementor_header_footer","meta":{"footnotes":""},"class_list":["post-322","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/exetergroupofcompanies.com\/zh\/wp-json\/wp\/v2\/pages\/322","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exetergroupofcompanies.com\/zh\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/exetergroupofcompanies.com\/zh\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/exetergroupofcompanies.com\/zh\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/exetergroupofcompanies.com\/zh\/wp-json\/wp\/v2\/comments?post=322"}],"version-history":[{"count":20,"href":"https:\/\/exetergroupofcompanies.com\/zh\/wp-json\/wp\/v2\/pages\/322\/revisions"}],"predecessor-version":[{"id":3591,"href":"https:\/\/exetergroupofcompanies.com\/zh\/wp-json\/wp\/v2\/pages\/322\/revisions\/3591"}],"up":[{"embeddable":true,"href":"https:\/\/exetergroupofcompanies.com\/zh\/wp-json\/wp\/v2\/pages\/53"}],"wp:attachment":[{"href":"https:\/\/exetergroupofcompanies.com\/zh\/wp-json\/wp\/v2\/media?parent=322"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}