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Bank Guarantees

Genuine Bank Guarantee Providers

Genuine Bank Guarantee Providers- Lease BG SBLC Providers

Kingrise Finance Limited are Genuine Bank Guarantee Providers and Lease BG SBLC Providers

What Is A Bank Guarantee / BG SBLC?

A bank guarantee is an assurance that a bank provides to a contract between two external parties, a buyer and a seller, or in relation to the guarantee, an applicant and a beneficiary. The bank guarantee serves as a risk management tool for the beneficiary, as the bank assumes liability for completion of the contract should the buyer default on their debt or obligation.

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 on a loan, the bank will cover the loss. Note that a bank guarantee is not the same as a letter of credit.

CLICK HERE TO GET A BANK GUARANTEE FROM ONE OF THE TOP TEN BANKS IN THE WORLD.

A bank guarantee acts similarly to a line of credit, except that a line of credit can be drawn upon at will by the bank’s client. A bank guarantee is used only if the client does not pay its vendor an agreed-upon amount. U.S. credit institutions are forbidden from assuming guarantee obligations, and therefore most international transactions require a standby letter of credit.

Bank guarantees serve a key purpose for small businesses; the bank, through their due diligence of the applicant, provides credibility to them as a viable business partner for the beneficiary of the guarantee. In essence, the bank puts its seal of approval to the applicant’s creditworthiness, co-signing on behalf of the applicant as it relates to the specific contract the two external parties are undertaking.

Genuine Bank Guarantee Providers and Lease BG SBLC Providers
Genuine Bank Guarantee Providers and Lease BG SBLC Providers

A bank guarantee is a contract between 3 different parties and they include:

  • The applicant (the party that requests a bank guarantee from the bank and borrows from a creditor)
  • The beneficiary (the party that receives a partial guarantee)
  • The bank (the party that agrees to sign and assures payment in case the applicant fails to repay the loan)

Bank guarantees are very commonly utilised among business entities. With the help of a bank guarantee, the debtor or borrower or customer will be able to purchase equipment, machinery, raw materials, acquire additional funds, etc. for commercial purposes. Bank guarantees help businesses as creditors will get a proper reassurance that the loan amount will be repaid by the bank if the business is unable to repay the loan entirely on time.

When a bank signs a bank guarantee, it promises to pay any amount according to the request made by the borrower. Hence, signing a bank guarantee implies a high risk for banks.

Please Click Here if you want to get a free bank guarantee without upfront fees.

The Different Types and Kinds of Bank Guarantees

  • Deferred payment guarantee: This refers to a bank guarantee or a payment guarantee that is offered to the exporter for a deferred period or for a certain time period. When a buyer purchases capital goods or machinery, the seller will give credit to the buyer when the buyer’s bank gives a guarantee that it will pay the unsettled dues of the buyer to the seller. Under this type of guarantee, payment will be made in installments by the bank for failure in supplying raw materials, machinery or equipment.
  • Financial guarantee: A financial bank guarantee assures that money will be repaid if the party does not complete a particular project or operation entirely. According to the financial guarantee agreement, when there is a delay in the completion of the project, the bank will make the payment.
  • Advance payment guarantee: Under this kind of guarantee, an advance payment will be made to the seller. There will also be a guarantee that if the seller fails to deliver the service or product accurately or promptly, the buyer will receive a refund of the payment.
  • Foreign bank guarantee: A foreign bank guarantee is provided by a bank on behalf of a borrower. This will be offered on behalf of the foreign beneficiary or creditor.
  • Performance guarantee: Under a performance guarantee, compensation of money will be made by the bank when there is any delay in delivering the performance or operation. Payment will have to be made even if the service is delivered inadequately.
  • Bid bond guarantee: Under this type of guarantee, there will be a supply bidding procedure. This will be conducted by the contractor for the owner of an infrastructure or industrial project or any kind of operation. The contractor of the project will guarantee that the best bidder or the highest bidder will have the capability and authority to implement a project as per his or her preferences. The bid bond will be given to the owner of the project as a proof of guarantee and the bond will imply that the project will have to be devised according to the bid contract.

Real-World Example

For a real-world example, consider a large agricultural equipment manufacturer. While the manufacturer may have vendors in many places, it is often best practice to have local vendors for key parts, both for accessibility and transportation cost reasons.

As such, they may wish to enter into a contract with a small metalworks shop that is located in the same industrial area. Due to the small vendor being relatively unknown, the large company will require the vendor to secure a bank guarantee before entering into a contract for $300,000 worth of machine parts. In such a case, the large company will be the beneficiary, and the small vendor will be the applicant.

Should the small vendor receive the bank guarantee, the large company will enter into a contract with the vendor. At this point, the company may pay the $300,000 in advance, with the understanding that the vendor is to deliver the agreed-upon parts in the following year. If the vendor is unable to do so, the agricultural equipment maker can claim the losses resulting from the vendor breaking the terms of the contract from the bank.

Through the bank guarantee, the large agricultural equipment manufacturer can shorten and simplify its supply chain without compromising its financial situation.

Genuine Bank Guarantee Providers
Genuine Bank Guarantee Providers

Comparison between Bank Guarantee and Letter of Credit

Many times, people get confused between bank guarantee and a letter of credit. However, one should understand that both are pretty different.

A bank guarantee refers to a commercial or financial instrument that is provided by a bank, where the bank assures or guarantees a beneficiary that it will make the payment to the bank in case the actual customer fails to meet his or her obligations. The bank will pay on behalf of the customer who requests for a bank guarantee.

On the other hand, a letter of credit refers to a promise or commitment in writing made by a bank or any other financial institution or corporation to a particular seller that payment will be made to the seller if the seller completes performing whatever is mentioned in the letter of credit. For the bank to make the payment on behalf of the original buyer, there should be a documentary proof that the seller has completed the transaction accurately by delivering the right product or service on time. The seller will get a guarantee from the bank that the seller will definitely pay the amount on behalf of the original buyer once the obligations are fulfilled.

Under a bank guarantee, if the buyer is unable to make the payment to the seller or creditor, then the bank pays the fixed amount to the seller as the obligations of the contract are not met. On the other hand, under a letter of credit, the bank makes the payment to the seller once he or she delivers. This is because the seller has completed fulfilling the required obligations.

Bank guarantees are competitively priced in nature generally. They are usually valid for a long period. The tenure of a bank guarantee is usually high. Moreover, bank guarantees are commonly accepted in almost all countries. Bank guarantees are available in Indian Rupee as well as currencies of other nations. Hence, they are very helpful for global transactions with parties in different foreign countries.

Advantages of Bank Guarantees

To the applicant:

  • Small companies can secure loans or conduct business that would otherwise not be possible due to the potential riskiness of the contract for their counterparty. It encourages business growth and entrepreneurial activity.
  • The banks charge low fees for bank guarantees, normally a fraction of 1% of the overall transaction, for the assurance provided.

To the beneficiary:

  • The beneficiary can enter the contract knowing due diligence’s been done on their counterparty.
  • The bank guarantee adds creditworthiness to both the applicant and the contract.
  • There is a risk reduction due to the bank’s assurance that they will cover the liabilities should the applicant default.
  • There is an increase in confidence in the transaction as a whole.

Disadvantages of Bank Guarantees

  • The involvement of a bank in the transaction can bog down the process and add an unnecessary layer of complexity and bureaucracy.
  • When it comes to particularly risky or high-value transactions, the bank itself may require assurance on the part of the applicant in the form of collateral.

So if you are seriously looking for a Bank Guarantee (BG) then make sure you use a reputable Financial Services Provider with decades of experience such as Kingrise Finance Limited.

For more information please Email us: info@kingrisefinance.com

Categories
Bank Guarantees

Lease Bank Guarantee Providers

Kingrise Finance Limited are Lease Bank Guarantee Providers, Genuine Bank Guarantee Provider, BG SBLC Providers, Bank Instrument Providers, financial instrument providers, monetizers of bank instruments, international bank guarantee providers, genuine bank instrument providers & sblc providers. 

TABLE OF CONTENTS

1. What is the Meaning of Bank Guarantee?
2. What are the Types of Bank Guarantee?
3. What are the Uses of Bank Guarantee?
4. What are the Advantages and Disadvantages of Bank Guarantees?
5. What are the Costs and Charges of Bank Guarantee?
6. What are the major Differences between BG & Letter of Credit (LOC)?
7. What is the process to obtain or acquire a bank Guarantee (BG)?

1. What is the Meaning of Bank Guarantee?

A bank guarantee is a promise from a bank or a financial institution that if a particular borrower defaults on a loan, the bank will cover the loss.

The bank guarantee signifies a lending institution ensures that the liabilities of a debtor is going to be met. In other words, if the debtor is unsuccessful to settle a debt, 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 acts similarly to a line of credit, except that a line of credit can be drawn upon at will by the bank’s client. A bank guarantee is used only if the client does not pay its vendor an agreed-upon amount. U.S. credit institutions are forbidden from assuming guarantee obligations, and therefore most international transactions require a standby letter of credit. 

Lease Bank Guarantee Providers - Kingrise Finance Limited
Lease Bank Guarantee Providers

2. Types and Examples of Bank Guarantees

There are many different kinds of Bank Guarantee namely:

  • A Payment Guarantee assures a seller the purchase price is paid on a set date.
  • An Advance Payment Guarantee acts as collateral for reimbursing advance payment from the buyer if the seller does not supply the specified goods per the contract.
  • A Performance Bond serves as collateral for the buyer’s costs incurred if services or goods are not provided as agreed in the contract.
  • A credit security bond serves as collateral for repaying a loan.

For example, St. Marys hospital is a new hospital that wants to buy $1 million in medical equipment. The equipment vendor requires St. Marys hospital to provide a bank guarantee to cover payments before they ship the equipment to St. Marys hospital. St. Marys hospital requests a guarantee from the lending institution such as Kingrise Finance Limited ( kingrisefinance.com ) keeping its cash accounts.  Kingrise Finance Limited essentially cosigns the purchase contract with the vendor. bank guarantee provider- Kingrise Finance Limited

KEY TAKEAWAYS

  • A bank guarantee is when a lending institution promises to cover a loss if a borrower defaults on a loan, of which there are many examples.
  • Individuals often choose direct guarantees for international and cross-border transactions.
  • A bank guarantee enables the customer, or debtor, to acquire goods, buy equipment or draw down a loan.

3. What are the Uses of Bank Guarantee?

  • When large companies purchases from small vendors, they generally require the vendors to provide guarantee certificate from banks before providing such business opportunities.
  • Predominantly used in the purchase and sale of goods on credit basis, where the seller is assured of payment from the bank in case of default by the buyer.
  • Helps in certifying the credibility of individuals, which in turn, enables them in obtaining loans and also assists in business activities.

Though there are lots of uses from a bank guarantee for the applicant, the bank should process the same only after ensuring the financial stability of the applicant/business. The risk involved in providing such a guarantee must be analysed thoroughly by the bank

CLICK HERE TO GET A BANK GUARANTEE FROM ONE OF THE AAA RATED BANKS IN THE WORLD

4. What are the Advantages and Disadvantages of Bank Guarantees?

Bank guarantee has its own advantages and disadvantages. The advantages are:

  • Bank guarantee reduces the financial risk involved in the business transaction.
    • Due to low risk, it encourages the seller/beneficiaries to expand their business on a credit basis.
    • Banks generally charge low fees for guarantees, which is beneficial to even small-scale business.
    • When banks analyse and certify the financial stability of the business, its credibility increases and this, in turn, increase business opportunities.
    • Mostly, the guarantee requires fewer documents and is processed quickly by the banks (if all the documents are submitted).

On the flip side, there are some disadvantages such as:

  • Sometimes, the banks are so rigid in assessing the financial position of the business. This makes the process complicated and time-consuming.
    • With the strict assessment of banks, it is very difficult to obtain a bank guarantee by loss-making entities.
    • For certain guarantees involving high-value or high-risk transactions, banks will require collateral security to process the guarantee.

5. What are the Costs and Charges of Bank Guarantee?

Generally, BG charges are based on the risk assumed by the bank in each transaction. For example, a financial BG is considered to assume more risk than a performance BG. Hence, the fee for financial BG will be higher than the fee charged for performance BG.
Based on the type of the BG, fees are generally charged on a quarterly basis on the BG value of 0.75% or 0.50% during the BG validity period. Apart from this, the bank may also charge the application processing fee, documentation fee, and handling fee.
In some cases, security is required by the bank from its applicant, which is generally 100% of the BG value. In certain cases, collateral security or cash margin may also be accepted by the issuing bank.

6. Difference between Bank Guarantee (BG) & Letter of Credit (LOC)

Bank Guarantee is not the same as a letter of credit, although with both instruments the issuing bank accepts a customer’s liability if the customer defaults. With a guarantee, the seller’s claim goes first to the buyer, and if the buyer defaults, then the claim goes to the bank. With letters of credit, the seller’s claim goes first to the bank, not the buyer. Although the seller will likely get paid in both cases, letters of credit offer more assurance to sellers than guarantees generally do.

LOC is a financial document which imposes an obligation on the bank to make payment to the beneficiary on completion of certain services as required by the applicant. LOC is issued by the bank when the buyer requests his bank to make payment to the seller on the receipt of certain goods or services.
That is, when the buyer runs into cash flow difficulties or similar situations and thus cannot make immediate payment to the seller, he will approach his bank to make the payment to the seller on submission of certain documents. The bank will later recover the amount paid from the buyer along with the required charges.


On the other hand, under BG, the bank is required to make payment to the third-party only if the applicant fails to make the payment to the third-party or does not fulfil the required obligations under the contract. A BG is essentially used to ensure a seller from loss or damage due to the non-performance by the other party in a contract.

However, there are a lot of differences between LOC and BG.

Major differences between Letter of Credit (LOC) and Bank Guarantee (BG)

ParticularsLOCBG
NatureLOC is an obligation accepted by a bank to make payment to a beneficiary if certain services are performed.BG is an assurance given by the bank to the beneficiary to make the specified payment in case of default by the applicant.
Primary liabilityBank retains the primary liability to make the payment and later collects the same from the customer.The bank assumes to make the payment only when the customer defaults to make payment.
PaymentBank makes the payment to the beneficiary as and when it is due. It need not wait for a default to be made by the customer.Only when the customer defaults the payment to the beneficiary, the bank makes the payment.
Way of working  LOC ensures that the amount will be paid as long as the services are performed as per the agreed terms.BG assures to compensate for the loss if the applicant does not satisfy the specified conditions.
Number of parties involvedThere are multiple parties involved here – LOC Issuing bank, its customer, the beneficiary (third party), and advising bank.There are only three parties involved –  banker, its customer, and the beneficiary (third party).
SuitabilityGenerally, this is more appropriate during the import and export of goods and services.Suits any business or personal transactions.
RiskBank assumes more risk than the customer.Customer assumes the primary risk.

 7.  What is Bank Guarantee (BG) Monetization And How Do You Monetize a bg?

monetizers of bank instruments- monetize bg sblc via Kingrise Finance Limited
monetizers of bank instruments- monetize bg sblc via Kingrise Finance Limited

Bank Guarantee (BG) Monetization or monetisation is the process of converting bank instruments such as Bank Guarantee (BG) or sblc into money or legal tender.

Monetizing bank guarantee signifies raising finance or a credit line against it. If you have bank guarantee or a letter of credit, you might be able to monetize it. For bank guarantee monetization and to raise finance against it, it is paramount that the bank guarantee has been specifically formulated for the purpose of raising finance. Bank guarantees framed for other purposes cannot be generally monetized or financed.

Monetizing Bank Guarantee liquidates the bank guarantee and uses them as reinforcement for cash. Almost any bank guarantee all over the world can be used to fund a project. Bank guarantee can be leased or it can be owned.

Kingrise Finance Limited are monetizers of bank instruments such as Bank Guarantees (BG) and Standby Letters of Credit (SBLC). We are bg sblc monetizers.SBLC (Standby Letter of Credit) and BG (Bank Guarantee) are both financial instruments issued by banks and financial institutions. These financial instruments are used to obtain loan and financing from banks, they are also used for trade finance, foreign exchange as well as import and export transactions.

Bank Guarantees (BGs) can be Monetized for:

  • Cash
  • Placed into Trade Programs (PPP Private Placement Programs)
  • or a Hybrid of Immediate Cash and funds in a Trade Program.

Standard Monetization Terms For BG / SBLC.

  • BG and SBLC to be monetized must be issued by top 20 AAA rated banks such as HSBC, Citi, barclays, Stanchart etc.
  • BG and SBLC from unrated banks cannot be monetized.
  • Instruments with a Value OVER 5 Million Dollars
  • BG & SBLC MUST have at least 11 months validity prior to expiry
  • We prefer monetization transactions of $10 million or more, but we will accept transactions as low as $5 million transaction amount
  • Transaction turnaround time between 10 to 14 working days or less
  • Exceptions can be made to minimum transaction
  • Brokers and intermediaries must have a legally binding agreement
  • A broker must be direct to his client. We will not entertain diasy chain of brokers.

Bank Instrument Monetization is a low-cost, low-risk method of project funding or trade finance that monetizes financial instruments by converting them into cash or cash equivalent by liquidating the instruments.

Monetization converts unused assets into cash which can then be used to fund imports, exports, project financing and international trade transactions.

URGENT NOTICE: It might interest you to know that there are only 10 genuine bank guarantee providers in the world and Kingrise Finance Limited is the leading provider of bank financial instruments such as BG, DLC and SBLC. Contact us if you want to know the list of the 10 genuine bg sblc providers in the world and we will be glad to share that information with you.

8. DESCRIPTION OF BUY/PURCHASE BANK GUARANTEE (BG)

1. Instrument:                BG (Bank Guarantee) Standby Letter of Credit (SBLC), cash-backed, 
2. Total Face Value:          Eur/USD 2 Million (Min) to Eur/USD 500m (Max)
3. Issuing Bank:              HSBC Hong Kong, Barclays Bank London, Deutsch Bank AG, Frankfurt  or any AA Rated Bank.
4. Term / Age:                One (1) Year and One (1) day, Fresh Cut
5. Invoice Price:              45% Net and 47% Gross of the face value of each BG/SBLC to the Seller, including 2% consultancy fees as per IMFPA.

6. Consultation Fee:       In total of 2%, which is to be split and paid to the consultants as follows:

                                       1% to …(Seller’s Mandate).., paid by the Seller/Payer-1

                                       1% to ………………………, paid by the Buyer/Payer-2 7. Delivery of instrument:          Bank-To-Bank by SWIFT MT-760, as per the Schedule of Delivery of Buy-Sell Agreement

8. Payment for instruments:                   By SWIFT MT-103 wire transfer
9. Original Hard Copy:                 By bonded courier to Buyer’s designated Depository Bank within Seven (7) bank working days after receipt of BG/SBLC(s) settlement payment by SWIFT MT-103 into the Seller’s account.

9. BELOW IS THE DESCRIPTION OF LEASE BANK INSTRUMENTS (BG/SBLC)

1. Instrument:               Fully Cash Backed Bank Guarantee {BG} or StandBy Letter of Credit {SBLC}
2. Total Face Value:       USD 2Million (Min) to USD 500m (Max)
3. Issuing Bank:             HSBC Hong Kong, Barclays Bank London or any prime Bank.
4. Age:                        One Year and  One Day (with rolls and extensions where applicable) 
5. Leasing Price:            4%  (+ 2% brokers commission where applicable) 2% broker commission applies to clients that were introduced by brokers
6. Delivery:                   SWIFT MT-760
7. Payment:                  MT103  Wire Transfer
8. Hard Copy:                Bonded Courier within 7 banking days.9. Bank Transmission fee: Depends on the face value of the bank instrument

10. What is the LTV (Loan To Value) for leased bank instruments?

At Kingrise Finance Limited, we offer the best rates in the industry. All our bg sblc are issued from prime banks and we offer 80% LTV.

11. What is the process to obtain or acquire a bank Guarantee (BG)?

The best way to obtain a bank Guarantee (BG) Is through Kingrise Finance Limited. Kingrise Finance Limited was incorporated in Hong Kong on 22-SEP-1999 as a Government Licensed Money Lender with CR No.: 0689078. We are leading providers of Business Loan, SME Loans, Project Financing, Recourse Loan, Non Recourse Loans and Bank Financial Instruments such as Standby Letter of Credit Funding, Bank Guarantee, Performance Guarantee Bond, Tender Bond Guarantee, Advance Payment Guarantee, Bank Comfort Letter, BG/CD/BD/BCL/DLC/LOC/SLOC/SBLC etc.

We have been providing these financial services to our numerous customers all over the world including importers, exporters as well as customers that need credit enhancements or trade finance facilities to execute projects locally or internationally.

Our loan interest rate is just 3% annually and you can get loan financing from us with or without security or collateral. The loan term is up to 30 years with a grace period up to 3 years for those in the construction industry.

Our bank instruments, bg and sblc/sloc are issued from prime banks such as Barclays Bank London, Standard Chartered Bank, HSBC Hong Kong or any rated AAA bank of your choice. All our financial instruments are Cash-Backed and can be used as collateral to secure funding for projects, Discounting, Monetization and Private Placement Programs (PPP).

We deliver with time and precision as set forth in the agreement. Our terms and Conditions are reasonable, below is our instrument description. As a growing trader, importer or exporter, a bank guarantee or letters of credit from Grand City Investment Limited can help you to close more deals.

The procedure is very simple; the instrument will be reserved on euro clear to be verified by your bank, after verification an arrangement will be made for necessary bank documents and stock testing expenses, the cost of the Bank Guarantee will be paid after the delivery of the MT760.

Description OF INSTRUMENTS: (Bank Guarantee BG/ Standby Letter of Credit SBLC)

  1. Instrument: Bank Guarantee (BG/SBLC)
  2. Total Face Value: Eur/USD 5M MIN and Eur/USD 10B MAX (Ten Billion EURO/USD).
  3. Issuing Bank: HSBC Bank London, Barclay’s bank London,Credit Suisse and Deutsche Bank Frankfurt.
  4. Age: One Year, One Month
  5. Leasing Price: 6% of Face Value plus 2% commission fees to brokers.
  6. Delivery: Bank to Bank swift.
  7. Payment: MT-103 or MT760
  8. Hard Copy: Bonded Courier within 7 banking days.
Lease Bank Guarantee providers, Bank Instrument Providers, financial instrument providers, monetizers of bank instruments, international bank guarantee providers, genuine bank instrument providers & sblc providers

Why Choose Us?

  • Fast Turnaround
  • Best Top Rated Banks
  • Competitive Low rates
  • No prepayment penalty
  • 2 Days for Commitment
  • Extremely Satisfied Clients
  • WE KEEP OUR PROMISE
  • 20 Years of Experience & Trust
  • No Personal Collateral Required
  • Solutions for every customer & every industry.
  • Loan amounts from $1 million to over $500 million
  • Fast Approvals & Fast Funding- Closing in as little as 5 days

BROKERS: We welcome new brokers who are direct to their clients. New brokers are welcomed and are rewarded with 2% commission on every deal they bring to us.

Feel free to contact us anytime via Email: info@kingrisefinance.com