Bank Guarantees in UAE
If the contractor isn’t able to fulfill the terms of a contractor, he is liable to pay a certain sum of money according to the business guarantee agreement. Bank guarantees are actually loan products, but what makes them different is that they are cheaper than cash loans. If you are new to the world of banking or business finance, you will need to learn more about bank guarantees in UAE before using it.
There are five different types of bank guarantees in UAE and they are payment guarantee, tender guarantee, tax and customers guarantee, performance guarantee, and advanced payment guarantee. Payment guarantee will ensure timely payment for the rendered services or delivered goods while tender guarantee ensures payment request fulfillment if the tendered refuses to cooperate.
Things To Know About Bank Guarantee In UAE
Another important aspect you may not know about bank guarantees is that they can be unconditional or conditional based on the monetary payment terms. Bank guarantees can also be secured and unsecured. If there is only a written agreement between the parties, then it’s an unsecured bank guarantee. On the other hand, bank guarantees with other documents or pledge of property are considered secure.
The different types of bank guarantees and the abundant amount of information can confuse or overwhelm you. This is why you will need an expert company who can help you guide through the entire process by explaining each and every step thoroughly. Our expert knowledge in bank guarantee will help you when it comes to deciding which bank guarantee is the best option for your business.