Bank guarantee
How do you ensure that an agreement or order will be fulfilled and paid for? A bank guarantee can offer certainty to your clients.
Bank guarantees offer certainty
Give your supplier the certainty that you will meet your financial obligations by using a bank guarantee. A bank guarantees it will pay the supplier the amount owed if you do not fulfil your financial obligation.
A bank guarantee makes you an attractive trading partner and can give you certain advantages. For example, you might not have to pay a deposit, you pay a lower rate, or you are given a payment extension.
Costs and types of bank guarantees
Banks charge costs when applying for, changing and claiming a bank guarantee. A commission is also calculated on the guaranteed amount during the term. Fees are can be charged for extra services, such as urgent processing. An advantage of a bank guarantee is that it is cheaper than credit.
Depending on the purpose, there are different types of bank guarantees:
- Prepayment guarantees
- Payment guarantees
- Maintenance guarantees
- Bid guarantees
- Rental guarantees
- Performance guarantees
- Customs guarantees
Bank risk
The bank minimises its risk by blocking an amount equal to the bank guarantee on your bank account. Or by deducting the amount from your credit limit.
Questions relating to this article?
Please contact the Netherlands Chamber of Commerce, KVK