Explanation of what a bank guarantee, swift, monetization, investment and loan are. What is a bank guarantee in simple words Loan or monetization under a bank guarantee

A bank guarantee is one of the most effective tools ensuring the security of the transaction.

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By its nature it is credit product, however, it is many times cheaper than a cash loan. For the provision of these services, the bank takes its own interest - a commission.

What is it

A bank guarantee is a written obligation of the bank to pay a certain amount of money to the customer in the event of failure by the contractor to fulfill the terms of the contract.

This instrument ensures the proper fulfillment of contractual obligations. For some transactions, this method of risk reduction is the main condition for cooperation.

There are three subjects involved in this process:

• guarantor - a financial institution that, for a certain fee (commission), undertakes an obligation;
• principal - the executor (debtor) under the main contract, the initiator of the provision of the obligation;
• beneficiary - the customer (creditor) under the main contract, whose interests are protected.

Species

The main classification of bank guarantees is based on the type of transaction being secured.

Guarantees are provided:

• tender (competitive) – reduces the customer’s risks if the winner of the tender refuses further cooperation;
• performance guarantee – guarantees timely and full delivery of goods, performance of work or provision of services;
• payment – ​​ensures timely payment for work performed or goods delivered;
• advance – guarantees the return of the advance payment in case of failure to fulfill the terms of the transaction in terms of volume or terms;
• customs, tax – ensures proper fulfillment of obligations to these government agencies.

There are other types depending on the purposes of the main transaction. Bank guarantees are also divided according to other criteria - revocable and irrevocable.

Why do you need a bank guarantee in simple terms?

To clarify what a bank guarantee is in simple language, it is convenient to use an example.

The scheme of work is as follows:

• company X (principal) enters into a contract for the supply of a consignment of goods with company Y (beneficiary), who is the customer or buyer of this product;
• firm Y requires guarantees that the terms of the contract will be fulfilled properly - the goods will be delivered in full and on time;
• for this purpose, company X or the executor under the contract engages a third party - bank Z (guarantor) to obtain a guarantee in the form of a written document;
• the guarantor bank, for a certain fee, undertakes to pay to form Y the agreed amount, for example, 30% of the amount of the main contract in the event of its failure to be fulfilled by company X;
• upon the occurrence of such a warranty event, Company X must demand payment of remuneration in writing;
• Bank Z will pay the agreed amount to the beneficiary and demand recourse from Firm X for the amount paid cash.

There is another way to secure a transaction - a deposit in in cash, however, to do this, the contractor must withdraw from circulation the required amount money. This is unprofitable, especially since it is often necessary to attract borrowed funds, which is 8-10 times more expensive.

Stages of registration

The entire registration procedure is described in seven stages:

1. the need to secure the transaction arises;
2. search by the contractor for a guarantor bank under the contract;
3. writing an application for a guarantee;
4. submitting an application and package of documents to the bank;
5. checking the client's solvency;
6. conclusion of an agreement between the bank and the client;
7. drawing up a guarantee agreement;

You can search for a suitable bank yourself or through a broker. You can also contact any branch of Sberbank, which works exclusively directly without intermediaries.

Video: What participants need to know

Package of documents

By issuing a guarantee obligation, the bank risks own funds, which must be paid upon the occurrence of the warranty l teaching. In the future, the client is obliged to return these funds, so the bank must make sure that the client is solvent.

The required package of documents depends on the specific bank, but its main components are:

• questionnaire, application;
• copies of TIN, extract from ERGYUL, issued no more than 30 days ago;
• a notarized copy of the minutes of the constituent meeting, a copy of the registration certificate;
• an up-to-date list of all LLC participants and copies of their passports;
• copies of licenses and certificates;
• lease agreements or ownership of premises;
• copies of documents authorizing the manager and chief accountant, as well as their passports;
• a copy of the draft secured transaction;
• balance sheet, profit and loss statement for last year;
• financial statements for the last six months;
• with the simplified tax system you need a declaration of income and expenses for the last year, with UTII - a tax declaration;
• certificate of absence of debts;
• report on audit etc.

The bank may also require copies of documentation on successfully completed similar contracts and similar confirmation of the company’s reliability.

Requirements

Before the bank agrees to issue a guarantee, the client will be checked for financial stability.

The principal company must meet the following requirements:

• period of activity on the market for at least 6 months;
• turnover must correspond to the amount of the obligation;
• there should be no unprofitable periods in the reporting except for seasonal ones;
• V credit history there should be no overdue debts, and sometimes the bank requires no loans;

Often you need to have a current account at the same bank.

Sample

The law of the Russian Federation does not dictate strict requirements for the preparation and appearance bank guarantee agreement. However, regulatory framework dictates the main provisions that must be in this agreement.

Main legislative documents:

• for state and municipal contracts - Law 44-FZ;
• For individual species legal entities – Law 223-FZ;
• clause 4 art. 368 part 1 of the Civil Code of the Russian Federation.

Samples of basic documents:

How to check in the register of guarantees

All guarantees issued on the basis of Law 44-FZ, in mandatory are entered into the Register. To check, you need to visit the United portal information system in the field of procurement. According to Art. 45 clause 11 of Federal Law No. 44-FZ, information must be entered into the system within one day from the date of registration of the warranty obligation.

Other guarantees issued on the basis of 223-FZ are not included in the register; they can be checked on the Central Bank website in the directory section credit institutions. Here you need to find a bank, turnover sheet and column No. 91 315 – turnover on warranty obligations.

In column No. 91 325 you will see a figure that should be compared with the amount of the guarantee obligation:

• zero or less – turnover does not reflect the issuance of a guarantee;
• equal or greater – the bank issues guarantees.

However, for small amounts, data is allowed to be entered at the end of the quarter.

List of banks

The Ministry of Finance provides a monthly list of banks that are allowed to issue bank guarantees. Therefore, you can find information about the list of such financial institutions on the Ministry of Finance website.

Validity of receipt

In order for the beneficiary to receive the amount of remuneration under the guarantee, justification is required.

These reasons could be:

• the contractor did not fulfill the terms of the transaction;
• the contractor refuses to provide documents certifying the proper execution of the contract;
• in case of violation of the terms of the main transaction by the contractor.

The list of required documents must be specified in the guarantee agreement.

Cost and example of its calculation

1. After appropriate tripartite negotiations with the initiator of the transaction, TCC company, as a representative of the Beneficiary/Lender and the Principal/Applicant BG as the Borrower, a Loan Agreement for financing is signed investment project Principal/Applicant/Borrower. This Loan Agreement is submitted to the issuing bank.

2. The Borrower/Applicant/Principal initiates the issuing of an information letter from the issuing bank (RWA) by the bank officer about the intention to issue a Bank Guarantee to his address while simultaneously sending copies of the letter from the official E-mail of the issuing bank to E-mail: This email address is being protected from spambots . You must have JavaScript enabled to view it. (our company), as well as for a third party - the final Beneficiary-Lender.

Thus, we obtain the right to sign the relevant monetization agreements banking instrument with those known to us financial structures, agreeing to work with us under certain conditions. This agreement We also provide it to the issuing bank for the release of the BG to the final Beneficiary.

3. In accordance with our letter to the Borrower/Principal and the Agreement for receiving investment loan funds submitted to the bank, the Principal/Applicant BG initiates the sending by the issuing bank via SWIFT MT799 Pre-Advice to the Ultimate Beneficiary’s account in the funding bank. In case of problems with receiving SWIFT MT799 Pre-Advice by the receiving bank, the Applicant/Borrower will organize a simultaneous referral to email certified copy of SWIFT MT799 Pre-Advice from the official E-mail of the issuing bank to the Beneficiary's bank and (CC copy) to the Lender.

4. Within 3 (three) banking days After receiving and confirming SWIFT MT799 Pre-Advice from the Borrower’s issuing bank, the Funding Bank will send SWIFT MT799 about its readiness to accept the BG via SWIFT MT760 and confirm the availability of funds.

5. Within 3 (three) banking days after receipt and confirmation of SWIFT MT799 about the readiness to accept the BG by the Beneficiary's bank, the issuing bank of the Borrower will send the BG via SWIFT MT760 to the receiving bank specified by the Lender for the designated Beneficiary. If necessary, the Applicant/Borrower arranges for the simultaneous e-mail of a copy of SWIFT MT760 from the official E-mail of the issuing bank to the Beneficiary's bank and (CC copy) to the Lender and (if any) to its representative.

6. Within 7 (seven) banking days after receipt and successful verification of SWIFT MT 760 in accordance with the Agreement with the Lender, the Issuing Bank will send the original Financial instrument to the Receiving bank by courier mail.

7. Payment of the Loan to the Borrower will be made by the Lender in in full(LTV%) or in agreed amounts in accordance with the schedule and other conditions previously agreed upon in the Agreement with the Lender.

Hello, dear colleague! In this article we'll talk about receiving a bank guarantee. This topic is relevant for most procurement participants who have become winners in government tenders or want to use BG as security for an application. For this reason, I will try to consider in as much detail as possible all the stages of obtaining BG, and will give you a step-by-step algorithm that will allow you to painlessly overcome each stage. There will be quite a lot of information, so you can make yourself a cup of coffee and spend 10-15 minutes studying the article. And so, let's go...

1. The concept of a bank guarantee

Step 2. Find out from the selected bank under what conditions it is possible to issue the required financial statement, as well as what list of documents should be provided to obtain it.

Step 3. Agree on a tariff.

Step 4. Fill out an application for obtaining a BG and send it along with a package of documents.

Step 5. Agree on the BG project.

Step 6. Pay the bill.

Step 7 Get BG.

This is what the process of obtaining a bank guarantee currently looks like.

Actions of the procurement participant after registration of the BG

Step 1. Receive the following package of documents from the banking institution, which should include:

1. one copy of the concluded agreement on the provision of a bank guarantee;
2. the original of the BG itself;
3. extract from the register of bank guarantees.

Step 2. Check the issued guarantee for its compliance with those established in Article 45 of 44-FZ.

9. How much does a bank guarantee cost?

And at the end of today’s article I would like to say a few words about the cost of a bank guarantee. The process of obtaining a bank guarantee is similar to obtaining a loan from a bank. In essence, this is a service, the cost of which depends on supply and demand for it. And as you know, demand creates supply. Therefore, the cost of registering a BG in different banks may vary significantly.

Let's take a look at what can affect final cost BG.

Firstly, this is the amount of the guarantee amount.

Secondly, this is the subject and validity period of the BG.

Thirdly, this is the presence or absence of collateral (collateral). A guarantee without collateral costs more. Currently, the commission for issuing BG ranges from 1% to 10%. On average it is 3-5%. Below you will find an example of calculating the cost of a BG provided as security for the performance of a contract.

Example of calculating the cost of a bank guarantee

Let’s assume that a procurement participant wins a contract to renovate a kindergarten. NMCC for this facility is 30,000,000 rubles. The amount of contract performance security established in the documentation is 30% of the NMCC, i.e. 9,000,000 rubles. Due date repair work according to the contract - 12 months (1 year). For example, let's take interest rate for issuing BG equal to 3%.

Now let's calculate the cost of the BG:

30,000,000 x 30% x 3% x 1 = 270,000 rubles.

Thus, it turns out that in order to receive an order worth 30 million rubles, the winner needs to purchase a BG for 270 thousand rubles, which is much more profitable than withdrawing 9 million rubles from the organization’s turnover for 12 months and transferring them to the Customer’s account.

That's all for today. See you in the next articles.

P.S.: If you liked the article, then “like” it and share it with friends and colleagues on social networks.

What is a bank guarantee?

Hi all. Yesterday I was at a cool restaurant for work - a client made an appointment there.

After a rather hearty dinner, he explained his situation.

He is planning a major deal, but the other side requires the most reliable security. She offered him the option of a bank guarantee - she told him what it was and what the main features were.

This suited him quite well, after which we moved to continue our meeting at karaoke. After a couple of days, I wanted to tell you all the details about this type of guarantee. Let's go.

Bank guarantees

A bank guarantee is one of the ways to ensure the fulfillment of obligations, in which a bank or other credit institution(guarantor) issues, at the request of the debtor (principal), a written obligation to pay the creditor (beneficiary) a sum of money upon presentation of a demand for its payment.

Requirements for the guarantee used by participants in the placement of government orders and the procedure for its provision and issuance are established Federal law 44-FZ “On the contract system in the field of procurement of goods, works, services to meet state and municipal needs.”

When concluding a State contract for an electronic auction, the winner is required to provide a scanned copy of the bank guarantee indicating the essential conditions State Contract- amount of security, validity period, name of the Customer, Contractor and subject of the contract.

This copy is attached as electronic document through electronic platform where the auction took place.

An issued bank guarantee is a document that cannot be returned because it is “not needed.” In accordance with the norms of current legislation, the bank guarantee is terminated under the following conditions:

• upon payment to the beneficiary of the amount for which it was issued;
• at the end of the period specified in the guarantee for which it was issued;
• due to the beneficiary's waiver of his rights under the guarantee and its return to the guarantor;
• a written statement by the beneficiary to release the guarantor from his obligations.

Termination of the guarantor's obligations on the above grounds does not depend on whether the guarantee is returned to him; the guarantor, who becomes aware of the termination of the guarantee, must immediately notify the principal about this.

Source: http://site/gosgarant.ru/bank-guarantees/

How is the transaction for registration of the BG going?

A bank guarantee is an assumption by the bank of certain financial obligations under contracts taken by his client.

For the client, the use of a guarantee means the opportunity to participate in large contracts and increased status as a reliable partner.

This is the definition given by the Civil Code of the Russian Federation. It can be considered basic.

By virtue of a bank guarantee, a bank, other credit institution or insurance organization(guarantor) give, at the request of another person (principal), a written obligation to pay the principal’s creditor (beneficiary) in accordance with the terms of the obligation given by the guarantor, a sum of money upon submission by the beneficiary of a written demand for its payment.

For final clarity, we will analyze the process of providing BG in more detail.

The general scheme is quite simple:

1. A client (individual entrepreneur or legal entity) who plans to enter into a large contract applies to a bank (or several banks) with an application for a guarantee.
2. Based on the package of documents, the bank makes a decision to provide the service or refuse.
3. If the bank agrees, the client opens a current account with it and pays a commission.
4. In the event of a transaction failure due to the fault of the client (principal) or in other cases when the client incurs debts under a guaranteed contract, these debts are paid by the bank (of course, within the agreed amount).

In simple words

It is necessary to understand that in order to obtain a BG, ownership of collateral of appropriate value is required.

Thus, this service relates not so much to insurance (an insurance contract is something like a bet) but to liquidity management.

The bank, in fact, does not guarantee the client’s actual debts, but that it will exchange these debts for his collateral (real estate, equipment), which is not liquid enough to secure the obligations under the agreement on its own.

This service speeds up the turnover of funds, which benefits all participants in the transaction.

Source: http://site/biznes-kredit.info/bankovskaya-garantiya/sut-chto-eto.html

Letters of credit and guarantees. How does this work

The buyer of goods is interested in purchasing goods with deferred payment, and the seller is interested in maintaining sales markets.

The seller is ready to supply goods with deferred payment (commodity credit), but requires additional guarantees of payment. Resolving the issue in in this case and the use of a bank guarantee is advocated.

After concluding a contract (1), providing for the delivery of goods on terms of subsequent payment, the buyer (principal) contacts the bank (usually the servicing bank) with a request to provide a bank guarantee of payment and provides the bank with a package of necessary documents (2).

The bank issues in favor of the seller (beneficiary under the guarantee) a bank guarantee (3), containing the bank’s obligation to pay the beneficiary a certain amount of money in the event of the buyer’s failure to fulfill its obligations to pay for the delivered goods.

The bank guarantee is sent to the beneficiary directly or through his servicing bank.

Attention!

After receiving a bank guarantee, the seller delivers the goods (works, services) (4). Upon arrival of the terms specified in the contract, the buyer makes payment for the delivered goods.

In case of non-payment, the supplier submits a demand for payment under the guarantee to the guarantor bank, which, after checking the stated claim for compliance with the terms of the guarantee, pays the beneficiary (supplier) the required amount.

Other contractual obligations can be secured in a similar way: for the delivery of goods, for the return of advance payment in case of non-delivery, for warranty service of supplied equipment, etc.

After concluding a contract (1) for the supply of goods (performance of work, provision of services), in which a documentary letter of credit is provided as a form of payment, the buyer (applicant under the letter of credit) applies to the servicing bank with an application to open a letter of credit (2).

The main terms of a letter of credit are usually specified in the contract (1).

Simultaneously with the application, the buyer provides the bank with cash coverage in the amount of the letter of credit (makes a reservation of funds).

If necessary, the buyer can contact the bank with a request to open a letter of credit providing a deferment for the buyer to transfer the coverage.

When concluding an agreement with the bank to open such a letter of credit (agreement to open an uncovered letter of credit), cash coverage is provided to the bank in accordance with the agreed schedule, but no later than the due date of payment under the letter of credit.

After receiving all the necessary documents from the applicant (buyer) and concluding the agreement, the buyer’s bank (issuing bank) opens a letter of credit (3) - sends a corresponding message to the seller’s bank.

The seller's bank (advising bank) informs the seller (beneficiary) about the opening of a letter of credit (3).

After receiving notification of the opening of a letter of credit, the beneficiary (seller) ships the goods (performance of work, provision of services) (4).

To receive payment for shipped goods, the seller provides a package of documents (5) specified in the letter of credit to the advising bank.

The advising bank, depending on the terms of the letter of credit, may either be authorized to make payment under the letter of credit (5), or must forward the provided documents to the issuing bank.

After checking the documents, the bank makes payment under the letter of credit (6). If documents are drawn up in violation of the terms of the letter of credit, payment is made with the prior consent of the buyer.

If the provided documents are drawn up in full compliance with the terms of the letter of credit, payment under the letter of credit is made by the banks, regardless of the buyer’s opinion and the conditions for providing them with cash coverage under the letter of credit.

After payment is made under the letter of credit, the documents previously received from the seller are transferred to the buyer.

Source: https://cib.com.ua/ru/services/corporate-banking/shemy_garantiy_ru

Bank guarantee as a way to ensure fulfillment of obligations

A bank guarantee is a way of ensuring the fulfillment of the obligations of a company providing goods or services to the customer.

In Russia, the bank guarantee has not yet found such widespread use as in foreign countries. However, recently the popularity of this type of security for the fulfillment of obligations has been increasing due to the use of a bank guarantee to ensure the execution of government contracts.

A bank guarantee is a written obligation of a bank or other credit institution, insurance organization, (guarantor) assumed at the request of another person (principal), by virtue of which the guarantor, subject to the conditions provided for by this obligation and at the request of the principal’s creditor, must pay the latter a certain amount .

In practice, the term “guarantee” is often used as a synonym for “guarantee”.

However, a bank guarantee differs significantly from all other methods of ensuring the fulfillment of an obligation.

The similarity between a guarantee and surety is that both the guarantor and the surety undertake the obligation to pay a sum of money in the event of failure by the debtor to fulfill the obligation. The participants in the relationship are the same.

The peculiarity of a bank guarantee is that it is a one-sided transaction. It is independent and independent from the obligation that it provides.

Even if the guarantee contains a reference to this obligation (naturally, a bank guarantee cannot exist without the obligation that it secures), the existence of the obligation provided for by the bank guarantee to pay a sum of money to the debtor’s creditor and its fulfillment are in no way related to the dynamics of the obligation that it is intended to ensure.

The guarantor is not released from fulfilling his obligations, even if the main obligation has ceased or was declared invalid, the bank guarantee continues to remain in force.

Attention!

A bank guarantee is characterized by urgency and irrevocability, which means that the guarantor has no right to unilaterally, i.e. without the consent of the beneficiary, refuse the obligations assumed.

Revocable guarantees are extremely rare, as they do not correspond to the nature of a bank guarantee and cause distrust on the part of beneficiaries.

The beneficiary can assign to a third party his right of claim against the guarantor only if the guarantee itself provides for such a possibility.

A bank guarantee is characterized by a highly formalized relationship. For issuing a bank guarantee, the Principal pays a fee to the guarantor.

Advantages

Despite the fact that the issuance of bank guarantees is carried out on a reimbursable basis, it is beneficial for clients to use it, so a bank guarantee makes it possible to avoid the diversion of funds from circulation. And this is not the only advantage of using it.

Advantages of a bank guarantee for the Borrower:

1. a bank guarantee makes it possible to participate in the supply of goods and services for state and municipal customers,
2. a bank guarantee makes it possible to receive from a counterparty commodity credit, which is secured by a bank guarantee,
3. it is possible to defer payment of the amount under the contract for the provision of goods or services for the period for which the guarantee is issued,
4. the guarantee fee is usually lower than the interest on the loan,
5. there are programs for providing a bank guarantee without additional collateral,
6. When simplifying the procedure for issuing a bank guarantee, the difference in the cost of bank services increases.

Advantages of a bank guarantee for the Lender:

• guarantees are more reliable and quick to implement;
• a bank guarantee allows you to ensure the fulfillment of obligations by the company executing the contract to the customer if the delivery or work is not performed or is performed differently than provided for in the contract;
• a bank guarantee distributes risks between the contractor and the customer who signed the contract;
• this form of securing an obligation encourages the contractor to accurately and timely fulfill his obligations under the threat of claims from the customer for improper fulfillment of obligations under government contracts;
• the guarantee protects the customer from risks associated with advance or periodic payments to the contractor;
• the presence of a bank guarantee helps the customer assess the financial position of the contractor and, as a rule, indicates his ability to fulfill his obligations under the main agreement, since the bank’s consent to issue a guarantee to the contractor indicates a stable financial situation supplier.

Objects and subjects

The parties to the relationship under a bank guarantee are:

1. Guarantee.
2. Principal.
3. Beneficiary.

Only a bank, other credit institution, or an insurance company can act as a guarantor.

However, in accordance with amendments to Federal Law 94-FZ “On placing orders for the supply of goods, performance of work, provision of services for state and municipal needs, which entered into force on August 2, 2010. insurance companies were excluded from the list of organizations that can issue a guarantee to secure a government contract.

Warranty issued by any other legal entity(commercial or non-commercial), state authority or local government, is void, i.e. invalid, since all of these entities do not have the right to issue a bank guarantee.

The role of a principal is any person who is a debtor in any obligation. This could be a loan obligation, a purchase and sale agreement, a lease, etc.

A beneficiary is any person who is a creditor of the principal under an obligation that is secured by a bank guarantee.

The initiative in forming relations regarding a bank guarantee belongs to the Principal. At his written request, a guarantee is issued. The position taken by the Beneficiary has no legal significance.

Although in practice, the debtor's initiative is dictated by the creditor's requirements. For example, when concluding a purchase and sale agreement, which provides for the possibility of paying for goods in installments, the seller may require that the buyer’s obligations to pay for the goods are secured by a bank guarantee.

The desire to become a guarantor is expressed by a bank or other credit institution by issuing a corresponding written certificate.

Types of BG

Depending on the purpose of the bank guarantee, there are several types of it.

Bid guarantee or tender guarantee serves to secure the payment claims of the tendering party in relation to the party that makes the offer, in the event that the latter either refuses the offer, or cancels the bid after bidding, or refuses to sign the contract or provide additional guarantees its implementation.

Payment guarantee. This type of guarantee is used to secure the buyer's payment obligations to the seller.

It is used, as a rule, when settlement occurs upon receipt of goods (services) by the principal or in the case of a trade loan. Typically, a payment guarantee is unconditional, i.e. it provides for payment upon the beneficiary’s first request.

Guarantee for customs payments. This type of bank guarantee is issued to importing enterprises so that they can ensure customs payments, can pay the amounts of expenses required by the customs authorities, penalties for loss, damage, issuance of goods without the permission of the customs authorities in violation established deadlines removal from a customs warehouse.

Performance guarantee. A performance guarantee is a bank's obligation to pay the buyer specified amounts or penalties upon his request in the event that the seller's obligations under its contractual relationship are not fulfilled or are performed improperly.

Money back guarantee. It represents the bank's obligation to return the advance amount (or its unused portion) in the event that the seller does not fulfill its obligations to supply goods under the contract.

Loan repayment guarantee. This bank guarantee is used to secure credit transactions.

Depending on the conditions for paying the beneficiary a sum of money, one can distinguish between a guarantee on first demand (unconditional) and a conditional guarantee.

In the first case, payment is made upon the first written request of the beneficiary, in accordance with the terms of the guarantee.

In the second case, the guarantor must also make a payment in accordance with the terms of the guarantee upon the written request of the beneficiary, but already accompanied by documents proving or confirming the non-fulfillment (improper fulfillment) of the principal’s obligations.

Bank guarantees can be secured or unsecured. A secured guarantee requires the existence of a pledge of property or other form of security, while an unsecured guarantee is a simple written obligation of the bank.

Guarantees are also divided into direct and counter-guarantees. In the first case, the obligation to the beneficiary is assumed by the guarantor bank itself.

Attention!

A counter-guarantee is issued if the bank, on behalf of the principal, requires the issuance of a guarantee from another bank (including a foreign one), issuing a counter-obligation.

A confirmed bank guarantee can be confirmed in full or in part by another bank - a confirmed bank guarantee, which bears joint liability to the beneficiary.

Several banks acting through the main guarantor bank can participate in issuing a bank guarantee; in this case, a syndicated (consortial) bank guarantee is issued.

Such guarantees are applied in large (including international) transactions, and than more bank ov involved in issuing a guarantee, the more expensive this service is.

Relationship between the parties when issuing a guarantee

Despite the fact that a bank guarantee is a one-sided transaction and when concluding it, the will of only one party (the guarantor) is sufficient, the legal relationship between the guarantor and the principal has a complex content. Registration of a bank guarantee is carried out in several stages.

Basic normative act regulating the relationship between the parties is the Civil Code Russian Federation. For state or municipal contracts, the requirements for a bank guarantee and the procedure for its provision are established by Federal Law 94-FZ “On placing orders for the supply of goods, performance of work, provision of services for state and municipal needs.”

Stages of obtaining a guarantee:

• The Principal sends a written request to the Guarantor to provide a guarantee. Without such a request, the bank guarantee is invalid.
• The guarantor decides on the possibility of issuing a guarantee.
• The Principal and the Guarantor enter into an agreement that will regulate their relationship, define rights and obligations.
• The Principal pays the Guarantor a fee for issuing a bank guarantee.
• The Guarantor issues a bank guarantee to the Principal. It determines the amount of the amount for which it is issued, formulates the terms of payment, indicates the validity period of the guarantee, and a list of documents that the Beneficiary must submit along with the request.
• The Principal transfers the bank guarantee to the Beneficiary. The issued bank guarantee must contain information allowing the beneficiary to verify the following:
  • that the guarantee is issued by an entity that has the right to do so, which must be indicated in its license;
  • that the person who signs the document is authorized to perform such actions. In this regard, the beneficiary must either review the guarantor's license, or a certified copy of the license must be submitted along with the guarantee.

Relationships upon the occurrence of circumstances covered by the guarantee

If the conditions specified in the contract occur, the Beneficiary has the right to demand that the guarantor pay the amount or part thereof in cash.

The requirement is made in writing, accompanied by the documents specified in the guarantee.

It must also indicate how the principal violated his obligations. The beneficiary must complete these actions before the bank guarantee expires.

The guarantor must consider the beneficiary's request and the documents attached to it within a reasonable time.

He is also obliged to exercise reasonable care to determine whether this requirement and the accompanying documents comply with the terms of the bank guarantee.

When considering the beneficiary’s claim, the decisive factor is the formal compliance of the beneficiary’s requirements and the documents attached to it with the terms of the bank guarantee, and not the determination of the beneficiary’s guilt or the analysis of the relationship between the beneficiary and the principal.

There are only two possible reasons for refusing to satisfy a claim. In the first case, the demand and/or the documents attached to it do not meet the terms of the guarantee; in the second case, the demand and/or the documents attached to it are submitted after the period specified by the guarantee.

The guarantor is obliged to immediately notify the beneficiary of the refusal to satisfy his demands, as well as provide the reasons for such a decision.

The guarantor must immediately inform the beneficiary and the principal of the information he has received that the main obligation has either been fully or partially fulfilled, or has terminated for other reasons, or is invalid; in this case, the amounts stipulated by the guarantee are not transferred to the beneficiary.

But if, after such notification, the beneficiary makes a repeated demand, the guarantor is obliged to satisfy it.

The guarantor's obligation to the beneficiary is limited to payment of the amount for which the guarantee was issued.

This is due to the fact that the guarantor’s fulfillment of his obligation occurs as a result of payment to the beneficiary of the amount of money specified by the guarantee. The guarantor is not responsible for losses, does not pay penalties, etc.

The liability of the guarantor is not limited to the specified amount in the event that the guarantor does not fulfill the obligation assumed or performs it in bad faith.

In this case, the beneficiary may suffer losses, for example, if the guarantor did not consider his claim within a reasonable time. Therefore, the beneficiary's losses are compensated in excess of the amount for which the bank guarantee was issued.

The guarantor has the right to demand from the principal, by way of recourse, reimbursement of the amounts paid by him to the beneficiary under the bank guarantee, on the terms determined by the agreement between the guarantor and the principal, and in support of which the guarantee was issued.

The agreement may provide for the principal’s obligation to compensate the guarantor for his property losses, both in full and in part.

The same agreement may contain conditions for the release of the principal from liability, determine the timing of payment by the principal to the guarantor of the corresponding amounts, etc.

Attention!

The principal cannot be required to pay amounts that were paid by the guarantor to the beneficiary not in accordance with the terms of the guarantee or for violation of its obligations to the beneficiary.

However, according to paragraph 2 of Art. 379 of the Civil Code of the Russian Federation, such a condition as full or partial compensation of the corresponding expenses of the guarantor may be provided for by a bank guarantee.

Termination of a bank guarantee is made by payment by the beneficiary of the amount for which the guarantee was issued (proper fulfillment of the obligation) or by the end of the period established in the guarantee.

Also, the guarantee can be terminated by offsetting the counterclaim, the coincidence of the guarantor and the beneficiary in one person, the impossibility of fulfilling the obligation, etc.

According to paragraph 2 of Art. 378 of the Civil Code of the Russian Federation, the guarantor is obliged to immediately notify the principal of the termination of the bank guarantee.

The beneficiary may waive its rights under the guarantee. In such a case, the beneficiary may either return the guarantee or declare in writing that the guarantor is released from its obligations.

Source: http://site/www.souz-finance.com/info/article/articl1.html

What is a bank guarantee - in simple words

A bank guarantee is a document confirming the bank's guarantee to the customer. Its presence confirms that the contractor will fulfill the contract, otherwise the bank will compensate all losses to the customer.

Advantages

The contractor can be sure that if the customer fails to pay for the work performed, the bank will pay for the work performed under a bank guarantee.

For the Customer, the guarantee is beneficial due to its low cost and the ability to pay the contractor in case of unforeseen circumstances.

A guarantee is a very flexible and convenient financing instrument: if an agreement is reached with the seller on the use of the guarantee and the buyer is granted a deferred payment, then the buyer can independently plan purchases and settlements with the seller, provided that the amount of the buyer's debt to the seller does not exceed the amount of the bank guarantee.

The advantage of a bank guarantee is that it helps to avoid various risks, even subject to payment of a certain commission.

There are different pros and cons of a bank guarantee for different parties to the transaction.

Advantages of a bank guarantee for the borrower's organization:

1. Upon receipt of a bank guarantee, it becomes possible to supply goods and services to government customers;
2. Upon receipt of a bank guarantee, it becomes possible to obtain a commercial loan, which the bank guarantee provides;
3. Upon receipt of a bank guarantee, it becomes possible to obtain a deferment of payments under the concluded contract for the goods and services provided during the validity period of the guarantee;
4. The commission for the guarantee provided is usually lower than the established bank interest for a commercial loan;
5. Regular clients may be provided with a bank guarantee without collateral, under certain programs;
6. When receiving a bank guarantee in a simplified way, the difference in payment for services performed increases.

Advantages of a bank guarantee for a lender organization:

• Issued bank guarantees are highly reliable and quick to implement;
• The issued bank guarantee ensures the fulfillment of obligations by the executing organization of the concluded contract to the customer in the event that the necessary supplies of goods or work were not performed properly;
• The issued bank guarantee redistributes all kinds of risks between the customer and contractor organizations;
• The issued bank guarantee is a powerful incentive for the accurate and proper execution of all contractual terms under a concluded contract, due to the fact that claims may be brought against the customer organization for dishonest fulfillment of contractual terms;
• The issued guarantee provides the customer with a kind of protection against various risks associated with advance payments to the performing organization;
• A bank guarantee makes it possible to conduct an assessment financial condition the executing organization, in order to identify the ability to fulfill the assigned obligations, since the credit institution issues a guarantee only to organizations with a stable financial position.

Flaws

You have to pay to issue a warranty. Financial institutions will not provide such services for free. And although the cost of opening and maintaining a bank guarantee is less than the interest on the loan, the principal still bears additional costs.

The bank must pay compensation based on one claim of the creditor, having carried out only a formal check of the submitted documents for compliance with the terms of the guarantee agreement.

The bank guarantee does not cease to be valid with the fulfillment of the main obligation.

For the creditor of the main obligation there is a risk associated with the revocation of the license of the financial institution who issued the guarantee.

And if the guarantee agreement itself does not specify the sequence of actions in this case, the security may simply cease to be valid.

There are many models of bank guarantees, so the parties can choose the one that best suits the interests of each.

Since advantages for one side often result in disadvantages for the other, it is worth looking for a balance point when both parties can cooperate mutually to their advantage.

Dates of issue and validity

The guarantee is issued by the bank (issuing bank) for a certain period, which can be extended by order of the principal.

The period for issuing a bank guarantee varies depending on the type of bank guarantee and its amount. Bank guarantees in the amount of up to 30 million rubles often fall under express issuance schemes.

Attention!

Banks and brokers offer the issuance of such guarantees within 1-3 days. Online Service VBC offers the issuance of an express Bank Guarantee within 1 hour. If the bank guarantee amount is from 30 million rubles, the issuance period from the bank is from 1 to 5 days.

All bank guarantees are unlimited and have no final expiration date.

Species

There are various types guarantees: guarantee of payment, guarantee of fulfillment of obligations, guarantee of return of advance payment, guarantee of participation in a tender, etc.

Bank guarantee of payment - the bank provides a guarantee for the payment of the amount specified in the contract or agreement in favor of the seller or executor.

Tender bank guarantee (Bid Security Guarantee) is a document issued by the bank for the payment of an amount in favor of the tender participant. In the event that the contractor refuses to fulfill obligations or the contract is not signed on time.

Bank guarantee of fulfillment of obligations - when the bank undertakes, for example, in the case of a corresponding application from the seller in favor of the buyer, to pay a specific amount of money if the seller does not fulfill its obligations.

Bank guarantee for the return of the advance payment - in this case, the bank’s obligation is to pay the advance amount in favor of the buyer if the principal has not fulfilled the obligations taken in accordance with the conditions contained in the contract.

Bank guarantee in favor of customs and tax services– in accordance with departmental Order No. 1281 dated December 7, 2007, the Russian Federal Customs Service can and should accept financial support corresponding payments.

Such a guarantee is provided by banks and insurance companies that are necessarily included in the special Register of the Federal Customs Service of the Russian Federation (that is, trustworthy).

Bank guarantee for tourism operators - when travel companies receive a license, they are subject to strict requirements, and the presence of bank guarantees for transactions is one of them.

Depending on the characteristics of payments to the contractor, the types of bank guarantees are of two main types: unconditional (on first demand) and conditional.

A conditional bank guarantee is a bank’s obligation to not pay a specified amount to the order executor, but only subject to the provision of documents indicating the customer’s non-payment.

Unconditional bank guarantee - implies payment by the guarantor bank upon the first request of the beneficiary (in writing) without any additional conditions.

All warranties are secured and unsecured.

A secured bank guarantee requires the presence of some collateral that acts as security.

The collateral can be any property owned by the customer: real estate, goods in circulation, equipment, securities etc.

An unsecured bank guarantee by a bank assumes the absence of collateral and is issued on the basis of a written commitment of the bank.

A reliable bank guarantee has the following principles: urgent and irrevocable. Under these characteristics, it is assumed that the bank does not have the right to unilaterally refuse to pay funds to the contractor.

There are also other types of bank guarantees, for example, a syndicated bank guarantee. This bank guarantee is issued by several banks that operate through one bank.

A syndicated guarantee is usually issued for large transactions, domestic and international. Its cost depends on the quantity financial organizations who take part in this transaction.

In addition, there are also express guarantees and counter-guarantees. A direct guarantee implies that the payment of obligations will be made by the bank itself.

A counter-guarantee assumes that the bank that issued it may demand counterpayment for obligations from a third-party bank, which is also a party to the transaction.

How to get it?

There are several ways to obtain a bank guarantee; we will try to briefly explain the advantages and disadvantages of each of them.

• Bank. The longest way is to contact the bank directly, choose the most suitable one from all the banks providing financial statements, collect all the documents yourself (see the list here), and wait for the bank to respond.
• Broker. This method is simpler, but may require paying a fee to the broker. But you don’t have to collect all the documents yourself. The broker will do this for you and also submit applications to various banks after which you can choose the most suitable one, ready to issue a guarantee according to your conditions.
• Automated Online Service VBC. The easiest way to obtain a bank guarantee. Personal manager will help you collect all the necessary documents, as well as submit them to all partner banks in a couple of clicks. All you have to do is choose the most convenient and suitable offer for you.

As a tool for ensuring the obligations of the contractor to the customer, a bank guarantee today is considered one of the most effective options. At the same time, it is beneficial to both parties to the contract: the customer receives a guarantee of a secure transaction, and the contractor has the opportunity not to distract significant amounts equity from circulation to provide.

The mechanism of its action is as follows:

• Obtaining a guarantee. The executor of the contract applies to the bank to receive required document. The bank reviews the application and makes a decision on issuance. The contractor pays a fee for receiving the guarantee, the amount of which is a certain percentage of the guarantee amount. Then the document is transferred to the customer and if it is accepted, the contractor begins to fulfill his obligations.

• Occurrence of a warranty case. If the contractor is unable to fulfill his obligations, then the customer must contact the guarantor with a written application to recover funds. There are two types of guarantees - undisputed, when after an application the bank must immediately pay the required amount, and conditional guarantees. The conditions under which payments are made for the performer in this case are indicated in the documents.

• Making guarantee payments. The agreement must stipulate within what time frame and to which account the funds should be received. The amount of the penalty for each day of delay is also indicated.

After this, the bank guarantee expires. In situations where payments from the bank are not required, the guarantee obligations are canceled upon expiration of the period specified in the agreement. Also, a reason for declaring a document invalid is the customer’s written refusal of his requirements under the contract. Thus, a bank guarantee becomes an excellent method of insuring transactions and reducing risks.

The financial company "RusFin" is ready to offer its assistance to companies in the country in obtaining guarantee obligations from banks on terms favorable to you. We interact with leaders banking organizations, whose names are included in the list of reliable guarantors of the Ministry of Finance of the Russian Federation. Having a large number of partners makes it possible to choose the most suitable option for your company.