What is a Standard Letter of Credit (LC) or Bank Guarantee?
There are effectively two main types of Bank Guarantees,
- A Direct Guarantee where the account holder instructs his bank to issue a Guarantee directly in favor of the Beneficiary, and
- An Indirect Guarantee where a second bank is requested to issue a Guarantee in return for a counter-Guarantee. In this case the Issuing Bank will indemnify losses made by this second bank in the event of claim against the Guarantee.
A Bank Guarantee is considered a “Demand Guarantee” and as such is governed by the International Chamber of Commerce (ICC) Uniform Rules for Demand Guarantees (URDG).
How can a Bank Guarantee/Standby Letter of Credit help you?
For agents, brokers, corporations, government linked companies, small-medium sized enterprises, and traders can assist in:
- *Acting as a Performance Guarantee (Performance Bond)
- *Acting as a Payment Guarantee
- *Acting as a Conditional Payment Guarantee (Conditional Payment Undertaking)
- *Guaranteeing and securing a Credit Line/Loan
- *Acting as an Order & Counter Guarantee
TFC can help you obtain this important financial instrument within a 48 -144 hour turnaround time upon full submission of documents required.