Need of Bank Guarantee:

In this environment where new startups are being encouraged, bank guarantees plays a crucial factor in encouraging these startups, it helps the new firms to set up efficiently which is a boom for small scale businessmen. At the initial stages of their business, they can raise the required money in credit keeping the bank as a surety. The credibility of the bank or financial provider reduces the transaction risk in a business transaction.

                                                   Two Types of Bank Guarantee:

Advance Payment guarantee- 

This type of guarantee is mostly used in export and import business but is now extended to Domestic trade. Buyers of goods generally use this guarantee to secure the advance payment made by them. Advance guarantee paid can be recovered as it is the primary obligation of the bank which is giving the guarantee.

Payment Guarantee- 

This guarantee makes the debtor bound for the payment, this is a more secure guarantee as collateral securities is given with these type of guarantee , in case of default by the debtor the bank can recover the given amount from the collateral securities given by the debtor.

Contact:

Jason Gavin

Email: jasongavin44@gmail.com

Telephone/WhatsApp: + 44 7452 390049

Twitter: @JasonGa58390383


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