Bank Guarantees/Standby Letters of Credit (SBLC) are used to secure payment of a stated sum of money to a named party (the beneficiary) in the event of non-performance or default by a party in the relationship. Payment will be made by beneficiary bank on presentation of a compliant written demand for payment by the beneficiary. Bank Guarantees can be used as a substitute for cash deposits with counterparties, freeing up working capital and potentially securing better contract terms. There is no difference between a Guarantee and an SBLC in regards to their intended purpose; however, they may be governed by different rules and local laws.

TYPES OF GUARANTEES/SBLC

There are two distinct types of Guarantees/SBLC:

• Performance - Underpin performance-based, non-monetary obligations and payment under the Standby, which are triggered in the event of non-performance of a future event. Examples include Bid/Tender Bond, Performance Bond, Advance Payment, Warranty or Maintenance Bond, Workcover Bond (Australia only), Customs, and Insurance.
• Financial - Have two types of functions: 1) Support facilities that are provided or 2) Used when protection is required from when a party (applicant) defaults on their financial commitments or obligations under a contract or agreement. Examples of Financial Guarantees include: Collateral Guarantee/SBLC, Financial Guarantee/SBLC, Rental Bond, Intra-Group Guarantee/SBLC, and Utilities Bond.

PRIMA GLOBAL VENTURES SDN. BHD TRANSACTIVE PROVIDES GLOBAL CONNECTIVITY FOR YOUR BUSINESS:

• Bank Instrument
• Bank Guarantee (BG)
• Standby Letter of Credit (SBLC)
• Monetization of Instrument
• Subsidiary Financing
• Letter of Credit LC
• Medium Term Notes MTN
• Euroclear
• Proof of Fund
• Comfort Letter
• Collateral and Surety Bond