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We at QFSystem.co & Partners assure bank guarantees to all our customers and take care of all the processes that are involved in it.
A Bank Guarantee is a promise made by the bank to meet the liabilities of a debtor in case an individual doesn’t meet the contractual obligations of the beneficiary and the applicant. The beneficiary looks up to the guarantee for payment.
Bank Guarantee is a useful financial instrument that enables companies to grow their existing business by making a bid on transactions.
There are various instruments it can be used which include a bid bond, a performance bond, advanced payment guarantee, a warranty bond, a letter of indemnity, a payment guarantee, a rental guarantee, or a confirmed payment order.
There are two types of bank guarantees:
Direct guarantee
A Direct Guarantee is a guarantee that a bank offers in favour of the beneficiary. The account holder asks the bank to do so.
Indirect guarantee
An indirect guarantee, as the name suggests is a guarantee that is not directly issued by the bank, however, a second bank provides the guarantee in place of an already issued guarantee. In a case where the second bank faces losses when a claim is done against the guarantee, then the original bank that provided the guarantee compensates the losses.
There are different types of bank Guarantees that are available. These are:
Performance Bond or Contract Bond
This type of bond is commonly used in the real estate industry that provides an assurance that a contractor will complete the project assigned to him.
Bid Bond
A Bid Bond is most commonly issued for bidders that are dealing in the construction based projects.
Warranty Bond
The Warranty Bond denotes that all the defects that are found in a specific project will be taken care off in the period of warranty.
Advance Payment Bond
An Advance Payment Bond is an agreement where an issuer takes the full responsibility for returning an advanced payment to the buyer in case the seller doesn’t pay.
Payment Guarantee
A Payment Guarantee provides the supplier financial security in case the applicant doesn’t pay in time for the goods or services which are supplied.
Letter of Indemnity
Letter of Indemnity is a guarantee stating that all the contractual provisions are taken care off otherwise the reparations will be made.
Rental Guarantees
Rental Guarantees is an assurance of payment to a landlord in a situation where the tenant doesn’t pay the rent.
SBLC
QFSystem.co & Partners assures standby letter of credit to all its customers without facing any sort of difficulties.
A standby letter of credit is a guarantee that a bank or a financial institution provides under which a beneficiary is paid on the behalf of a client when an applicant defaults.
This financial instrument is among the most preferred and flexible tool for making the secure payments.
A standby letter of credit came through as a legal limitation imposed by a US regulator on the authority of a bank for providing guarantees.
The standby letter of credit has gained a lot of popularity for the purposes of international trade. It provides an assurance or a guarantee that the party will get the payment no matter what the circumstances are.
We at QFSystem.co & Partners ensure that all our customers do not face any sort of difficulties or hassles. Our trade finance experts will provide you with the needed guidance.
Bank Application Form
The standby letter of credit is further divided into different types. These are as below:
- A performance standby
- A direct-pay standby
- An advance-payment standby
- A bid-bond or tender-bond standby
- A counter standby
- A financial standby
- An insurance standby
- A commercial standby
DLC
QFSystem.co & Partners assures the beneficiary the Documentary Letter of Credit which is a guarantee regarding the payment as per the letter. The Documentary Letter of Credit is mostly used for international transactions under which both the buyer and supplier operate from separate countries and build a relationship.
The letter has a condition stating that the compliant presentation should be under it.
The Documentary Letter of Credit allows the recipients to receive the credits crucial for financing a project. This makes it a very important financial instrument, especially for short-term needs. For settling the due amount, the recipients are hopeful of getting enough returns in the stated time frame.
A Documentary Letter of Credit consists of all the information like the expiry information, the date and time of the letter which is required by the beneficiary on presentation.
The beneficiary gets the compliant presentation which is a guarantee by the Documentary Letter of Credit for getting paid. Meeting the delivery conditions is the prime condition that needs to be met.
We at QFSystem.co & Partners will ensure that the bank writing the Documentary Letter of Credit on the behalf of the applicant verifies that all the terms and conditions are duly met for the documentation purposes before an amount is given to the supplier.
Bank Application Form
The issuing bank and beneficiary are the concerned parties for a Documentary Letter of Credit. The letter is under the control of the International Chamber of Commerce (ICC) rules and these rules are known as the Uniform Customs and Practice for Documentary Credits (UCP). Since, July 1st, 2007, the current version is into existence. The creditworthiness of the issuer comes in place of the buyer’s creditworthiness which gives the supplier the assurance that he will get paid.
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