bank guarantee
Lender's promise note
A bank guarantee is a promise from a bank to cover a debt or obligation if a customer fails to fulfill it.
Unlike a letter of credit, which pays directly, a guarantee only kicks in when the primary party defaults.
Common in international trade and construction contracts: The contractor provided a bank guarantee to secure the project.
Also called a banker's guarantee.
- letter of creditBank-backed payment promise
- advance paymentPayment made beforehand
- indemnityProtection against financial loss
- surety bondThird-party payment guarantee
- contractEnforceable written agreement
collateral · standby · bond · enforceability · demand · guarantor · credit assessment · underwriting · recourse · breach of contract · risk mitigation · insurance policy · creditworthy · signature · payment · pledge · principal · unconditional
- banking termsaccount number, routing number, balance, FDIC, credit check
- financial safetyemergency fund, savings, safety net, insurance, nest egg
- guaranteeswarranty, guaranty, pledge, oath, promise
- loan guaranteesFHA loan, VA loan, surety bond
- global financeinternational banking, financial hubs, central banks, capital flows, exchange rates
- Bank Depositsterm deposit, CD, certificate of deposit, time deposit, maturity date
bank guaranteeunsecured loan
Debt lacking pledged property
handshake deal · personal guarantee · gentleman's agreement · unsecured credit · signature loan