Bank guarantee
Bank Guarantee Process
We, Royal Cut Investment, Providers in Dubai can assist you by providing Bank Guarantees – BG MT760 from European Banks at ZERO Collateral. To obtain BG MT760 from rated banks, please follow the simple process given below:-
1. Initially, the client will submit the details of their trade to us; in terms of – a signed proforma or sales and purchase agreement of their trade deal or project.
2. BWT will review the deal between the buyer and seller. Then, we will update the client about our approval or rejection of their BG request.
3. If the request is approved, the client needs to sign a service agreement with us. And then, they need to pay the admin charges. So, we can start working on their request to issue BG MT760 without blocking their cash funds.
4. Once they sign the agreement and pay the admin charges, we will block our bank limit to structure their BG; and send the BG draft to the client for their review. Also, we will ask the client to provide further documents and pay the BG issuance fees.
5. Once we receive the draft approval, the documents, and the issuance fees, we will instruct our bank to issue the BG from our bank account via SWIFT MT760 to the counterparty’s bank account. Also, this entire process will be done within 48 working hours.
What is a Financial Bank Guarantee?
Also called a Bank Guarantee or BG MT760, it’s issued by a bank on behalf of its client upon their request. If a client wants to enter into a new project or trade deal, then they require a Guarantee to assure their commitment towards their counterparties. In this case, the client contacts their bank to avail BG MT760. The issued BG acts as a promise to assure the counterparty, that in case of buyer’s default, the bank will meet all financial obligations as stated in the contract.
As BG gives the required assurance, most of the trade dealings happen with the use of Bank guarantees. Further, this BG MT760 helps traders to do business & execute trade deals with big companies which couldn’t be possible without the use of a Letter of Guarantee. All these make Bank Guarantee, the popular financial instrument in today’s trade market.
To issue an MT760, your bank will demand you to block a 100% cash margin or a third-party assurance. If you don’t have enough cash funds to block as collateral, then your BG request will be declined. We are well aware of the crisis faced by traders and contractors in availing MT760. That’s why we support them by extending our bank facilities on their behalf and providing the required MT760 guarantees without blocking their cash funds.
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What is the Process of Bank Guarantee?
When importers/exporters get connected to do business, Trust is the glue that holds both parties. In such cases, the trust is easier to maintain, if a third party stands as a guarantor to bear any unforeseen crisis.
BG MT760 acts as an agreement between 3 parties, viz. the applicant, the recipient, and the bank. Whereas, the bank promises to cover a loss; if a buyer defaults. So by this, BG promotes trust between traders; which greatly encourages them to conclude their deal.
For example: If a project owner is going to sign a construction contract with the contractor or a buyer enters into a contract for the supply of goods; then they require a Bank Guarantee to assure their commitment in terms of payment to their counterparty. This gives assurance that the contractor will complete the task without any hurdles. In case of any default, the bank is obliged to meet the commitment as agreed in the contract. However, it doesn’t give any guarantee to any party regarding the completion of a project or the supply of goods and so on.
In case of any default in the contract and if the counterparty needs to claim the payment means, then the BG needs to be liquidated. To claim the BG, the seller or the contractor needs to submit the required documents to the banks as per the contract terms. The banks will review the documents and if it complies, then they will make the payment as compensation to the counterparty.
Advantages of Bank Guarantee
- Improve the credit ratings for issuers of industrial growth, revenue bonds, and commercial papers.
- Provide backup facilities for loans granted by third parties.
- Assure performance under construction and employment contracts.
- With BG, you can spread your working capital around, rather than tying up in a single project or trade deal.
Parties Involved in Bank Guarantee
How to Get Bank Guarantee?
Since banks take the commitment on behalf of the clients, the applicant needs to prove their creditworthiness to their banks to avail BG. Banks will also do a proper background check on the applicant and make an account of credit history, liquidity, past transactions, and so on.
Even if the applicant complies with all these terms, they will demand a certain percentage of the guarantee value as cash margin, assets as surety, or third-party assurance. The bank will start working on your BG request, only if the client obliges to all the terms and conditions of the bank.
If you are a buyer or contractor who requires a Bank Guarantee & if you don’t want to tie up your working capital in a single deal, then you can contact us. To apply BG MT760 on your behalf, without any cash margin, fill out the form fill out the form. We provide BG MT760 from rated banks within 48 working hours.
BG Cost
International Bank Guarantee Providers
Royal Cut Investment is an International Bank Guarantee provider in Dubai. We can provide BG MT760 on behalf of traders and contractors without obtaining any collateral from your end.
With our decades of expertise in offering trade finance services, we can assure you that we can provide you with the right solution to conclude your deal in a timely way. Further, we will be the one-stop solution for all the Bank instrument requirements of a growing trader.
Having BG MT760 in hand can assist you in concluding more worthy trade deals and contracts with principal suppliers. So, Apply for BG MT760 now & get it issued in 48 banking hrs!