Do You Know Everything About A Lease Bank Guarantee

THE HANSO N GROUP O F COMPANIE

Do You Know Everything About A Lease Bank Guarantee

The lease bank guarantee does not have a specific legal development, but has been configured by scientific doctrine as a 'signature loan'. These signature loans are legal mediation deals in the granting of credit through which Banks and Savings Banks guarantee the commitments of their clients

For a company, a bank guarantee or Standby Letter of Credit Monetization has great advantages, since with the guarantee, customers and suppliers have greater confidence in your company. Nowadays it is vital to have a guarantee since a lot of confidence has been lost in the agreements that are signed with third parties, due to the financial crisis that has left many agreements unpaid, and as a consequence of this, many companies have had to close.

The Standby Letter of Credit

Monetization contract by which we commit when we sign a bank guarantee is nothing more than guaranteeing to a third party that we will comply with the payment obligation. This contract, like any other, has an expiration or expiration thereof.

What the client or supplier is looking for when requesting a guarantee from a company is to guarantee payment for the product or service that is exchanged in the contract. In the event that the guarantee is executed, the client or supplier is sure that they will receive the amount since the financial institution is in charge of responding and has the assets and immediate liquidity to do so. Therefore, requesting this type of guarantee ensures that the payment is made.

WHAT ARE THE THINGS THAT ARE INVOLVED IN GETTING A LEASE BANK GUARANTEE?

Guaranteed: the debtor in this type of contract, that is, the person who requests the guarantee from the financial institution.

Guarantor: the financial entity that financially supports the guaranteed. In the event that the guarantor does not meet the debt with the third party, the guarantor is the one who responds. The beneficiary is the creditor of this type of contract. He is the one who can execute the guarantee and demand that the bank complies with the guaranteed obligation.

Letter of endorsement: it is the wording of the obligations and rights that arise from the signing of this financial contract.

Guaranteed amount: it is the amount of money that is guaranteed.

Guarantee period: it is the time in which the guarantee is valid.

Execution period: it is the time available to the beneficiary of the bank guarantee to claim such compliance from the financial institution.

Registration number: bank guarantees must be registered in a special registry of the financial institution, in order to record the issue and characteristics of the guarantee.