Bank guarantee
   HOME

TheInfoList



OR:

A bank guarantee is a kind of
guarantee Guarantee is a legal term more comprehensive and of higher import than either warranty or "security". It most commonly designates a private transaction by means of which one person, to obtain some trust, confidence or credit for another, engages ...
from a lending organization. The bank guarantee signifies that the lending institution ensures that the liabilities of a debtor are going to be met. In other words, if the debtor fails to perform the obligation, the bank will cover it. A bank guarantee allows the customer, or debtor, to acquire goods, purchase equipment or draw down a loan. A bank guarantee is a promise from a bank or other lending institution that if a particular borrower defaults, the bank will cover the loss. A bank guarantee is similar to but not the same as a
letter of credit A letter of credit (LC), also known as a documentary credit or bankers commercial credit, or letter of undertaking (LoU), is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an ex ...
.Bank Guarantee
''investinganswers.com''


References

{{Reflist Banking Legal documents Personal finance Real estate Securities (finance) Interest-bearing instruments