In the conditions of market economy no one is insured against financial risks and their consequences in the form of financial losses. Especially the risk increases on an initiation stage of business relations between subjects of economic activities when still there is no between them a trust. To exclude financial risks the bank guarantee will help.
So in a case if one of the subjects of economic activities participating in the transaction hasn’t paid for the goods, the performed works or services then the client’s indebtedness pays bank on demand which is exposed according to the established guarantee. It is very favorable to the subject of economic activities. After all for realization of financial operation it doesn’t need to withdraw means from monetary turnover.
Besides thanks to a bank guarantee the client can receive a delay on payments for the goods or the rendered services or can receive a commodity loan, many subjects of economic activities therefore how to receive a bank guarantee should know. The client compensates the received guarantee to bank, to credit establishment agrees to the concluded agreement.
Relations between bank or any other credit organization acting as the guarantor and the client are regulated by the agreement on granting of this banking service. The bank guarantee is given only to those clients who are solvent or have adequate security. So the bank insures itself against possible risks and provision of the borrower in this case plays a pledge role. As bank guarantee provision can be: property, financial assets, guarantees from other credit establishments, the guarantee property or financial from the third parties.
How to receive a bank guarantee?
The packet of the documents which list is established by bank-guarantor or the credit organization is necessary for registration and bank guarantee reception. As this bank product is equated to crediting, a packet of documents same, as well as at credit registration. Therefore the borrower should give in bank or in any other credit establishment three kinds of documents: constituent, complete financial both accounting records and the documents confirming the right to available property which can represent itself as pledge.
As the borrower puts in to bank the statement on bank guarantee granting. After detailed studying of the given packet of documents the bank-guarantor or any other credit establishment makes the decision on granting of a bank guarantee or refusal in the given service.
As any credit product the bank guarantee has its cost. Therefore the borrower should for the commission and the tariff (percentage) rate. The size of these payments is established by bank in each case individually and depends on a number of indicators. So the size of the commission is influenced by a general financial condition of the borrower and its provision. Today the commission on a bank guarantee can reach to 5 % annual.
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