Bank guarantee

A bank guarantee for new business opportunities

Take advantage of the opportunity to earn profit in domestic and export-import transactions which require a bank guarantee.

Take part in state and municipal tenders
Reduce risks in domestic and cross-border transactions
Buyers can replace prepayment for goods with a guarantee
Sellers can receive prepayment for getting bigger projects or manufacturing under way

Sign up for a phone consultation here or fill out the application.
Bank employee will contact you within 1 business day.
If necessary, sign the guarantee agreement at your nearest Swedbank branch.
Register the collateral (except in cases when the collateral consists in cash or term deposit).
Receive the requested guarantee at the specified branch or electronically, signed with the eSignature.

Expand the customers' field of commercial activities: to participate in public tenders, to receive orders for delivery of goods or services, to obtain services provided by business partners, to handle customs clearance procedures, etc.
Mitigate risks in international operations.
Replace an advance payment by a payment undertaking, especially for goods to be delivered in a longer period of time (by effecting an advance payment, the buyer is, in fact, providing an interest-free loan from its own resources to the seller). The buyer undertakes to effect payment by a specified date (payment guarantee). If the buyer defaults on his payment obligations, the bank that has issued the guarantee makes the payment upon the seller's request for payment.
Secure the beneficiary's right to the refund of the advance payment, even if his partner fails to perform his obligations to deliver goods under an agreement, makes only partial delivery, or fails to perform works under a contract (advance payment guarantee).
Receive an advance payment for launching major projects or starting production (advance payment guarantee).

Participate in tenders - the bank guarantees that its customer will not withdraw or modify his tender and, if awarded the tender, will sign the contract. In the event of breach of these undertakings the bank will effect payment of the sum specified in the guarantee to the party inviting the tender (the beneficiary) (bid bond; tender guarantee).
Support contractual performance by guaranteeing to honour the claims of the buyer/employer if the principal - the seller/contractor - fails to comply with terms and conditions of the contract (performance guarantee; performance bond);
Guarantee repayment of a loan (loan/credit line guarantee).
Guarantee payment of customs duties, excise tax and/or penalties (customs guarantee).
Depending on the customer's needs and terms and conditions of the contract, the bank can issue also other types of guarantees. For instance, for the customers using this product on a regular basis, it is possible to create a guarantee limit agreement for use with Swedbank, thus simplifying further issuing of bank guarantees.

The customer is liable for the performance of the contractual obligations underlying the bank guarantee. The beneficiary will claim the payment under the guarantee only if the principal has failed to perform his obligations.
A bank guarantee can only be cancelled prior to its expiration date if the original of the letter of guarantee has been returned to the bank or if the bank has received a written release from its guarantee obligations.
Although its issue results from the underlying contract between the bank's principal and the beneficiary, a bank guarantee is independent of such contract. Therefore, upon receipt of a demand to pay, made in accordance with the terms and conditions of the guarantee the bank will effect payment, even if the principal claims that the beneficiary is in breach of any of his contractual obligations.

To find out which financing option would work best for your particular company, sign up for a consultation!