A guarantee to secure the performance of a contract is one of the most popular types of bank guarantees. Its essence lies in the fact that the guarantor bank promises to pay money to the customer if the supplier violates the terms of the contract. Such a banking product allows the supplier company to provide security for the fulfillment of its obligations without withdrawing funds from circulation.
What it is
A bank guarantee is a written obligation of the bank to pay a sum of money to the counterparty of its client if the latter fulfills its contractual obligations improperly or does not fulfill them at all. The participants in such a relationship are called:
- The guarantor is the guaranteeing party, that is, the bank;
- principal - the party for whom the guarantee is issued;
- beneficiary - beneficiary under the guarantee.
The bank provides a guarantee to the principal on a reimbursable basis. In addition to fees, in many cases, banks also require a pledge, surety or a security deposit. However, some credit institutions (including Sberbank) offer such a product without collateral, as a rule, for relatively small amounts.
Guarantees for contract enforcement are issued in different currencies, but most often in rubles. The warranty is limited, the terms are usually set from one month to three years.
The warranty can be provided on traditional paper form or electronically.
When you need a guarantee
In Russia, guarantees for contract enforcement are most often used in the field of public procurement. Government agencies and municipal structures, when conducting auctions and tenders, in accordance with the law, require the supplier to provide security.
One of the ways to fulfill this condition is a bank guarantee. Securing contractual obligations by depositing money into the customer's account (before the contract is executed) is less popular.
Many private companies, when conducting their tenders, also stipulate that the supplier has a bank guarantee or other security.
Requirements for a guarantee to ensure the execution of a government contract
In order for a customer to accept a bank guarantee, it must meet certain requirements:
- Issued by a financial institution from the list posted on the website of the Ministry of Finance of the Russian Federation. This list is constantly updated.
- The warranty is included in a special register. The document is posted in the EIS, the data is open. Exclusion of warranty for contracts containing state secrets. A special closed register is kept for them.
- The warranty provided is irrevocable.
- The amount of collateral is 5-30% of the initial contract value.
- The warranty period is one calendar month longer than the contract period. If the customer has to claim compensation from the guarantor, additional time will be required to obtain it.
- The guarantee must comply with other requirements specified in the notice of public procurement.
How to get a
The procedure for obtaining a guarantee is approximately as follows:
- Review the terms of product provision at the selected financial institution on its website or from a consultant. Make sure that the firm or enterprise meets the requirements of the bank.
- Collect and submit a package of documents to the bank. Sometimes you need, in particular, a certificate of entry into the Unified State Register of Legal Entities, financial statements, a draft contract and others.
- Wait for the bank's decision. A decision is usually made within a few days. However, some banks use scoring models for issuing guarantees for small amounts (up to several million rubles), and then the decision may be known on the same working day.
- Coordination of the draft guarantee and payment of the invoice issued by the bank.
- Getting a guarantee.
- The bank enters the guarantee in the register and issues the corresponding statement to the client.
There are many companies on the market that offer assistance in obtaining this product. Credit and financial brokers for a fee help to choose a guarantor bank, collect a package of documents. Such a partner should be chosen very carefully: there is a risk of running into scammers.
