 | This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. Find sources: "Bank guarantee" – news · newspapers · books · scholar · JSTOR (January 2020) (Learn how and when to remove this message) |
A bank guarantee is a kind of guarantee from a lending organization. The bank guarantee signifies that the lending institution ensures that the liabilities of a debtor are going to be met. In other words, if the debtor fails to perform the obligation, the bank will cover it. A bank guarantee allows the customer, or debtor, to acquire goods, purchase equipment or draw down a loan. A bank guarantee is a promise from a bank or other lending institution that if a particular borrower defaults, the bank will cover the loss. A bank guarantee is similar to, but not the same as a letter of credit.
References
- What Is a Bank Guarantee? investopedia.com
- Bank Guarantee investinganswers.com