Think Before you Opt for BGs or Bank Guarantees

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Different Types of BGs and Its Advantages
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• There are a few times when businesses need to
  guarantee their payments and when things like
  these come up, the best available option is a
  bank guarantee.
• So what is a bank guarantee (BG)? Bank
  Guarantees are basically a kind of surety
  provided by any of the banks or financial
  institutions, where they guarantee to pay off the
  debts or any liabilities of an individual or a
  business group in case they are unable to do so
  on their own.

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How do BGs work?

• When someone uses a bank guarantee, it enables
  the person or the business organization to invest
  in a larger scale and can grow their business to
  a great extent.

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Before you opt for BGs or Bank Guarantees, you
must know how it actually works. It works like
this

• 1. The creditor, which means the bank, and the
  applicant must ascertain the need of the bank
  guarantee.
• 2. Then you as an applicant reach out to the bank
  or the financial institution and apply for a BG.
• 3. After that your bank or the financial
  institution runs a risk assessment and asks for
  security.

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What are the types of BGs?

• 4. The applicant furnishes the security and the
  bank, or the financial institution processes the
  bank guarantee.
• 5. The bank guarantee is sent to the creditors
  bank or the creditor, or the applicant may be
  asked to collect it in person to give it to their
  creditor.

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There are two types of BGs. They are

• 1. The first one is Direct Bank guarantee which
  is issued by the bank of to the account holder
  directly in favor of the beneficiary.
• 2. The second one is Indirect Bank Guarantee
  which is basically issued by another bank in lieu
  of a counter-guarantee.

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• However, financial institutions like The Hanson
  Group of Companies can provided you some other
  types of Bank Guarantees like Performance
  Guarantee, Advance payments guarantee, Payment
  Guarantee, Conditional Payment Undertaking,
  Guarantee Securing Credit line, Order and Counter
  Guarantee etc.

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The Benefits of Advantages
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• 1. A BG allows the applicant to defer the
  payments for goods and services based on the
  security provided by the bank.
• 2. The best thing is, the money isnt necessarily
  tied up in just one project it can be spread
  around.
• 3. The cash is always available to explore and
  expand business.

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• BGs are really beneficial for you and you can get
  a lot of advantages out of it. All you need to do
  is approach your bank for further info.

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