1. Business
  2. /
  3. Loans and financing
  4. /
  5. Bank guarantee

Bank guarantee

A bank guarantee is a written statement by a bank by which the bank irrevocably undertakes to pay the creditor (the person entitled under the guarantee) a certain amount of money according to the content of the guarantee document if the debtor (client/principal) fails to fulfill the guarantee.
Take advantage of the possibility of securing your business in the form of a bank guarantee.

Possibility to submit an application online via Business bankingTB

Possibility to submit an application online via Business bankingTB

Warranty issuing and advisory services, including professional consultations

Warranty issuing and advisory services, including professional consultations

More favorable contract conditions and strengthening of credibility in relation to business partners

More favorable contract conditions and strengthening of credibility in relation to business partners

Option to minimize your business risks

Option to minimize your business risks

How to get a guarantee

Simplify your business and process your application for the issuance or change of a bank guarantee conveniently via Business bankingTB. By the end of 2021, you will handle everything free of charge for processing the application.

Take advantage of online application and handle everything:

  • until the end of 2021 without a fee for processing the application
  • without a visit to the bank, wherever you are
  • without the need to verify the signature with the specimen signature kept in the bank
  • without subsequent delivery of the original documents to the bank
  • the application is delivered immediately after its submission to the place where it will be processed

Business bankingTB gives you a perfect overview:

  • about the status of your application
  • on active guarantees and the amount of drawing guarantees by currency
  • about the impending expiration of the guarantee and the possibility to apply for an extension directly through Business bankingTB

Apply for a bank guarantee via Business bankingTB

Log into Business Banking

You can also resolve the application for a bank guarantee through Tatra banka's sales network (branches, corporate centers or departments of large corporate clients).

Approval through the sales network is preceded by:

  • submission of an application for a bank guarantee, including the annexes set out therein,
  • agreement between the bank and the client on the method of securing liabilities and the amount of fees.

If you are interested in this product, contact your business advisor at the Tatra banka branch or the relationship manager at the bank's headquarters, with whom you will go through the details.

Thanks to the bank guarantee, you can stabilize your business activities

Benefits of a bank guarantee

Stabilize your business activities and minimize business risks thanks to the bank guarantee.

  • With a guarantee you enhance your credibility with business partners (the beneficiary of the guarantee).
  • A bank guarantee allows you to negotiate more favorable commercial conditions with your business partners (postponed payment, advance payment, release of retention money, substitution of cash in the account of a contracting authority or lessor of commercial premises, etc.).
  • In international trade, guarantees can be defined according to the Uniform Rules for Demand Guarantees issued by the International Chamber of Commerce in Paris and revised in 2010, Publ. 758, which incorporates international commercial practices.

Details

A bank guarantee is a written declaration by a bank under which the bank irrevocably commits to pay to the creditor (beneficiary of the guarantee) a certain sum according to the content of the letter of guarantee if the debtor (the client/guarantee applicant) fails to fulfill the obligation secured by the bank guarantee.

Guarantee type Benefit for the buyer Benefit for the seller
in a tender (bid bond) ensures a range of serious bids no need to pay a deposit in cash to the tender caller/buyer
payment guarantee option to have an invoice maturity postponed payments for supplies secured by the bank 
payment (for rent) guarantee the lessee does not need to pay a deposit in cash to the lessor the lessee’s payments to the lessor are secured by the bank
advance payment guarantee if the delivery of goods fails, the bank guarantees the refund of the advance payment made option to get an advance payment from the buyer
performance bond option of compensation in the event of poor-quality supplies or a failure to perform the contract Provides a better position to get a contract from the buyer or a to meet the requirement for getting a contract
retention money guarantee option of compensation in the event that the seller fails to eliminate faults option to have the retained money released before the technical warranty expires
customs guarantee an importer does not have to pay the customs fees upon release of goods for a customs procedure the payment of the customs fees to the customs office is secured by the bank

Types of bank guarantees

 Choose one of the five types of bank guarantees according to your business needs. 

  • Bid bond
    The caller of a tender requires this to be submitted to secure the transaction if the bidder fails to meet the bidding terms when concluding the contract or withdraws the offer during its binding period. The tender bidder is the applicant for this guarantee.
  • Advance payment guarantee
    The bank undertakes to refund the advance payment made by a buyer to a seller if the seller fails to or only partially delivers the respective goods. The seller is the applicant for this guarantee.
  • Payment guarantee
    The bank assumes a guarantee for the debtor's payment upon the delivery of goods or services. The buyer is the applicant for this guarantee.
  • Performance bond
    It is used to ensure the fulfillment of agreed contractual obligations. The bank may provide the guarantee throughout the work performance period or until expiration of the technical warranty (warranty guarantee). A performance bond may be an alternative for the buyer/customer to release the retention money (retention money guarantee). The seller/supplier/contractor is the applicant for this guarantee.
  • Customs guarantee
    Under this guarantee, the bank undertakes to pay the customs fees (customs duty, VAT, excise duty). The importer or guarantor approved by the customs authorities is the applicant for this guarantee.

Frequently Asked Questions

--- WJdocId-14527 ---
www.tatrabanka.sk | Dialog: *1100 | Tatra banka a.s.
https://www.tatrabanka.sk/en/business/bank-guarantee/