Bank
Guarantee and Letter of Credit are two financial instruments that are very
helpful to buyers and suppliers, especially when they are not too well known to
each other or are just starting out on a venture. These two financial
instruments are issued by banks to buyers and sellers and have many common
features. However, there are many differences that will be highlighted in this
article.
What is Bank Guarantee?
Bank Guarantee is like a financial
cover to the supplier for recovering losses or damages. It is issued by the
bank on the request of the buyer and given to the supplier. When the buyer
defaults on payments or there is any dispute between the two parties, the buyer
can instruct the bank to invoke the bank guarantee and recover the payment
mentioned in the instrument. It insures the supplier against losses if the
buyer fails to fulfill his part of the obligation. When
the buyer fails to pay the seller for goods he has supplied, the seller can ask
the bank for the amount mentioned in the Bank Guarantee and the bank is obliged to pay the beneficiary the aforesaid
amount. A Bank Guarantee is used in
situations where the two parties are relatively unknown and are entering upon a
contract.
What is Letter of Credit?
A
Letter of Credit is more commonly
used in international trade where the supplier is in one country and the buyer
is in another. This is a financial instrument that
guarantees a supplier that he will receive payment for the goods in time and
for correct amount. If the buyer does not pay in full, or makes delays, the
bank undertakes to pay the difference or the full amount to the supplier. Even
a buyer can ask the issuing bank not to pay the supplier until he is sure of
the goods having been shipped.
What is the difference between Letter of Credit and Bank Guarantee?
Major
difference between Bank Guarantee and Letter of Credit is that the
issuing bank does not wait for a default from the buyer unlike Bank Guarantee where a formal request
is made by the supplier to this effect. Bank Guarantee is therefore called a second line of defense while LC guarantees
timely payments for the supplier. LC is more of an obligation on the part of the issuing bank that has
to transfer the funds once criterion mentioned in the contract are fulfilled. Letter of Credit is thus more for
ensuring timely and correct payments.
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We are authorized Financial consulting firm that work directly with
ReplyDeleteA rated banks eg Lloyds Bank,Barclays Bank,hsbc bank etc
We provide BG, SBLC, LC, LOAN and lots more for client all over the world.
Equally,we are ready to work with Brokers and financial
consultants/consulting firms in their respective countries.
We are equally ready to pay commission to those Brokers and financial
consultants/consulting firms.
Awaiting a favourable response from you.
Best regards
WALSH SMITH, ROBERT
email : info.iqfinanceplc@gmail.com
skype: cpt_young1
We are authorized Financial consulting firm that work directly with
ReplyDeleteA rated banks eg Lloyds Bank,Barclays Bank,hsbc bank etc
We provide BG, SBLC, LC, LOAN and lots more for client all over the world.
Equally,we are ready to work with Brokers and financial
consultants/consulting firms in their respective countries.
We are equally ready to pay commission to those Brokers and financial
consultants/consulting firms.
Awaiting a favourable response from you.
Best regards
WALSH SMITH, ROBERT
email : info.iqfinanceplc@gmail.com
skype: cpt_young1
We are authorized Financial consulting firm that work directly with
ReplyDeleteA rated banks eg Lloyds Bank,Barclays Bank,hsbc bank etc
We provide BG, SBLC, LC, LOAN and lots more for client all over the world.
Equally,we are ready to work with Brokers and financial
consultants/consulting firms in their respective countries.
We are equally ready to pay commission to those Brokers and financial
consultants/consulting firms.
Awaiting a favourable response from you.
Best regards
WALSH SMITH, ROBERT
email : info.iqfinanceplc@gmail.com
skype: cpt_young1
We are authorized Financial consulting firm that work directly with
ReplyDeleteA rated banks eg Lloyds Bank,Barclays Bank,hsbc bank etc
We provide BG, SBLC, LC, LOAN and lots more for client all over the world.
Equally,we are ready to work with Brokers and financial
consultants/consulting firms in their respective countries.
We are equally ready to pay commission to those Brokers and financial
consultants/consulting firms.
Awaiting a favourable response from you.
Best regards
WALSH SMITH, ROBERT
email : info.iqfinanceplc@gmail.com
skype: cpt_young1
We are direct providers of Fresh Cut BG, SBLC and MTN which are specifically for lease, our bank instrument can be engage in PPP Trading, Discounting, signature project (s) such as Aviation, Agriculture, Petroleum, Telecommunication, construction of Dams, Bridges, Real Estate and all kind of projects. We do not have any broker chain in our offer or get involved in chauffer driven offers.
ReplyDeleteWe deliver with time and precision as sethforth in the agreement. Our terms and Conditions are reasonable, below is our instrument description.
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:
1. Instrument: Bank Guarantee (BG/SBLC) (Appendix A)
2. Total Face Value: Eur 5M MIN and Eur 10B MAX (Ten Billion USD).
3. Issuing Bank: HSBC Bank London, Credit Suisse and Deutsche Bank.
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.
"We are direct providers of Fresh Cut BG, SBLC and MTN which are specifically for lease, our bank instrument can be engage in PPP Trading, Discounting, signature project (s) such as Aviation, Agriculture, Petroleum, Telecommunication, construction of Dams, Bridges, Real Estate and all kind of projects. We do not have any broker chain in our offer or get involved in chauffer driven offers.
ReplyDeleteWe deliver with time and precision as sethforth in the agreement. Our terms and Conditions are reasonable, below is our instrument description.
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:
1. Instrument: Bank Guarantee (BG/SBLC) (Appendix A)
2. Total Face Value: Eur 5M MIN and Eur 10B MAX (Ten Billion USD).
3. Issuing Bank: HSBC Bank London, Credit Suisse and Deutsche Bank.
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."
"We are direct providers of Fresh Cut BG, SBLC and MTN which are specifically for lease, our bank instrument can be engage in PPP Trading, Discounting, signature project (s) such as Aviation, Agriculture, Petroleum, Telecommunication, construction of Dams, Bridges, Real Estate and all kind of projects. We do not have any broker chain in our offer or get involved in chauffer driven offers.
ReplyDeleteWe deliver with time and precision as sethforth in the agreement. Our terms and Conditions are reasonable, below is our instrument description.
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:
1. Instrument: Bank Guarantee (BG/SBLC) (Appendix A)
2. Total Face Value: Eur 5M MIN and Eur 10B MAX (Ten Billion USD).
3. Issuing Bank: HSBC Bank London, Credit Suisse and Deutsche Bank.
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."
"We are direct providers of Fresh Cut BG, SBLC and MTN which are specifically for lease, our bank instrument can be engage in PPP Trading, Discounting, signature project (s) such as Aviation, Agriculture, Petroleum, Telecommunication, construction of Dams, Bridges, Real Estate and all kind of projects. We do not have any broker chain in our offer or get involved in chauffer driven offers.
ReplyDeleteWe deliver with time and precision as sethforth in the agreement. Our terms and Conditions are reasonable, below is our instrument description.
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:
1. Instrument: Bank Guarantee (BG/SBLC) (Appendix A)
2. Total Face Value: Eur 5M MIN and Eur 10B MAX (Ten Billion USD).
3. Issuing Bank: HSBC Bank London, Credit Suisse and Deutsche Bank.
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."
"We are direct providers of Fresh Cut BG, SBLC and MTN which are specifically for lease, our bank instrument can be engage in PPP Trading, Discounting, signature project (s) such as Aviation, Agriculture, Petroleum, Telecommunication, construction of Dams, Bridges, Real Estate and all kind of projects. We do not have any broker chain in our offer or get involved in chauffer driven offers.
ReplyDeleteWe deliver with time and precision as sethforth in the agreement. Our terms and Conditions are reasonable, below is our instrument description.
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:
1. Instrument: Bank Guarantee (BG/SBLC) (Appendix A)
2. Total Face Value: Eur 5M MIN and Eur 10B MAX (Ten Billion USD).
3. Issuing Bank: HSBC Bank London, Credit Suisse and Deutsche Bank.
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."
We are authorized Financial consulting firm that work directly with
ReplyDeleteA rated banks eg Lloyds Bank,Barclays Bank,hsbc bank etc
We provide BG, SBLC, LC, LOAN and lots more for client all over the world.
Equally,we are ready to work with Brokers and financial
consultants/consulting firms in their respective countries.
We are equally ready to pay commission to those Brokers and financial
consultants/consulting firms.
Awaiting a favourable response from you.
Best regards
WALSH SMITH, ROBERT
email : info.iqfinanceplc@gmail.com
skype: cpt_young1
This comment has been removed by the author.
ReplyDeleteWe are authorized Financial consulting firm that work directly with
ReplyDeleteA rated banks eg Lloyds Bank,Barclays Bank,hsbc bank etc
We provide BG, SBLC, LC, LOAN and lots more for client all over the world.
Equally,we are ready to work with Brokers and financial
consultants/consulting firms in their respective countries.
We are equally ready to pay commission to those Brokers and financial
consultants/consulting firms.
Awaiting a favourable response from you.
Best regards
WALSH SMITH, ROBERT
email : info.iqfinanceplc@gmail.com
skype: cpt_young1
We are authorized Financial consulting firm that work directly with
ReplyDeleteA rated banks eg Lloyds Bank,BarclaysBank,hsbc bank etc
We provide BG, SBLC, LC, LOAN and lots more for client all over the world.
Equally,we are ready to work with Brokers and financial
consultants/consulting firms in their respective countries.
We are equally ready to pay commission to those Brokers and financial
consultants/consulting firms.
Awaiting a favourable response from you.
Best regards
WALSH SMITH, ROBERT
email : info.iqfinanceplc@gmail.com
skype: cpt_young1