Bank guarantee Guarantee performance and payment

With a bank guarantee you can cover performance and payment obligations – for example, when submitting tenders or signing contracts, making advance payments, securing credits or delivering goods made on open-account terms.

Bank guarantees

In the case of a bank guarantee, the bank commits to pay a specific amount to the beneficiary if the principal fails to furnish a guarantee for an agreed performance or payment. Guarantees are widespread across the globe and are used in domestic and cross-border transactions. Bank guarantees are also a sound argument in negotiations, because a bank will only issue a guarantee after thoroughly verifying the principal's creditworthiness and ability to deliver.

The same principle applied in a different form

Whether a direct or indirect bank guarantee, standby letter of credit, simple or joint and several guarantee or confirmed payment order – bank guarantees come in a wide variety of legal structures and forms. Which bank guarantee is suitable in which case and for which type of transaction? Talk to us in good time so that we are aware of your situation and needs and can recommend the best possible solution.

The guarantee is legally independent of the underlying contract that is to be covered. The bank that is acting as guarantor must pay if the conditions of the guarantee are fulfilled.

Also known as a standby LC; is mainly used in transactions with US contractual partners and in the Far East.

In accordance with the Swiss Code of Obligations; is used virtually exclusively for domestic business.

The payment undertaking is an irrevocable payment obligation, similar to a guarantee.

Also of interest to you

Got questions about a product?

Newsletter for companies

Overdraft facility or leasing